Impersonation Tokens: Fake USDT and Fake Ether Scams

Cybertrace is issuing an urgent alert for a malicious new scam tactic rapidly targeting more cryptocurrency users. Our expert analysts have encountered numerous fraudsters using impersonation tokens that look like the real deal but are actually worthless/untradable fake crypto. Using these to trick victims, scammers then extract further loot in the form of new “investments”, “taxes” or “fees”. This scam tactic is particularly pernicious as the offenders design the tokens to look deceptively real to the naked eye. Fortunately, our experienced investigators can spot the difference and identify fake USDT, Ether tokens and even fake Bitcoin. We then help victims by turning the tables on offenders, investigating, and identifying those responsible. In doing so, Cybertrace stands by your side in intelligently navigating the tsunami of fraud washing through cryptocurrency trading.

Cryptocurrency Fraud and Impersonation Tokens

While decentralized finance has opened up new investment and trading opportunities, its unregulated nature has also proven to be a honeypot for all kinds of crooks and scammers. Reported crypto losses in 2021 hit an all-time high of $14 billion, with most of these coming from scams. As explained in previous blogs, these typically include cryptocurrency trading and investment scams as well as NFT (non-fungible token) scams. In addition, some hackers now appear to build fake crypto such as USDT and fake Ether tokens to scam consumers.

Some of these fake tokens contain a 99% buying or selling fee, thus stealing all your money at either point of the transaction. Others, such as the notorious Squid Game token, don’t allow the buyer to resell at all. Additionally, some use misconfigured smart contracts to include security vulnerabilities that allow entry to hackers to steal all your funds. Others, finally, seek to impersonate trusted cryptocurrencies such as USDT or Ether. Whatever their methods, scammers appear to act with total impunity. Cybertrace investigators are aware of several hackers offering fake token generators freely on the internet. Unfortunately, this makes it even easier for rogues to forge impersonation tokens: fake USDT, fake Ether, and other fake crypto such as fake Bitcoin.

How Do Impersonation Tokens Work?

Once they have created fake crypto, USDT or fake Ether impersonation tokens, offenders usually follow a three-step process. Firstly, they send real-looking but fake USDT and fake Ether tokens to an investment scam victim’s Atomic Wallet address. Secondly, they provide the victim with a plausible-sounding pretext, such as providing a “guarantee”, “refund”, “withdrawal”, or “payout”. Finally, they pressure the victim into further “investment” and demand a “fee” or perhaps even “income tax”, aka another scam. Because the funds in their wallet seem real, victims are more likely to suspend critical judgment and trust the scammers. It’s only when they try to transfer the fake tokens to a legitimate exchange, like Binance or Coinspot, which won’t accept them, that it dawns on victims that something has gone awry. By then, though, it’s often too late, and the scammers have made off with their loot.

How Can I Protect Myself?

Luckily, there are some steps you can take to protect yourself when confronted with transactions that masquerade as “withdrawals” or “refunds” from a suspicious trading or investment platform. For established cryptocurrencies, the best way to protect yourself is via trusted explorers such as Etherscan or Blockchain Explorer. Look for red flags such as unrealistically low volumes of cryptocurrency transactions (hundreds instead of millions). The two images below show real and fake USDT side-by-side – notice how fake USDT has significantly fewer Holders and Transfers. This tells you that something is off. When that happens, don’t engage with the scammers offering fake Ether, fake USDT or fake Bitcoin any further. Instead, contact Cybertrace straight away and fight back.