Fake Liquidity Mining Scams
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Various fake website have been set up which claim to offer a liquidity mining service. Users will click a button "Receive" which authorizes a smart contract with spend access to their funds. In many wallets such as the CoinBase wallet, details of the transaction are not even provided to users. Scammers will sometimes give a small amount of payment to the users, hoping they will add more funds. After some time, all user funds in their wallet are taken. Coinbase often tells users who have fallen victim to this scam that their private keys must have been compromised, which is not what happened. If the scammers are contacted, they will inform users that they need to deposit more funds to retrieve the funds and resume earning the interest, however scammers will not return the funds.
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About Fake Liquidity Mining Scams
"My brother-in-law showed me his Coinbase Wallet a few weeks ago where he joined a mining pool and they were giving out Ethereum every day. He is also a Coinbase user so he showed me the Coinbase app to get too."
"I was new to cryptos, so I installed both apps from the Google Play Store to my Android phone and started my journey."
"The "mining pool" I joined is a DApp with the address u2e-free.com. This address is only accessible using a DApp browser inside the wallet (or with a wallet browser extension that I found out later)."
"I was totally confident with Coinbase Wallet's reputation, ignoring the suspicion of the unrealistic high profit. I believed that as long as money stays in my safe Coinbase Wallet and no one else knows my recovery phrase, it cannot be taken out without my approval."
"Initial I have around 60 usd in my wallet...then I chinese girl told me ..that there was a system that can earn passive incomes.. so she give me this address coinbasewallet.club , also she told me that I have to deposit 80 usd eth for the mining node, and 600 usdt to start mining."
"I deposit both quantities and join the node (26.11.2021) It charges around 20 usd eth. Each day I was getting earnings around 1.4% daily."
"After 4 days on 30.11.2021...some button appears in the system of coinbasewallet.club , only says APPLY for some rewards, and do not say anything that I have to deposit 50k. (That was the smart contract thing)"
The Reality
The same "opportunity" has existed in similar form on a wide variety of different web addresses.
"coinbasepool.net | coins-wallet.com | cbeth.io | coinbase00111.zone | eth2-usdt.com | defi.defi-usd.com | defi-usdteth.com | eth-base.org | et-event.co | usdtdefi.io | ustddefi.io | hydefieco.com | eth-pam.co | df-ethe.org | unidefi.me | cb-titan.com | cb-titan.me | p2p-eth.com | ethu2e.com | eth-pool.info | defi.usdt-defi.net | coinbasewallet.club | eth-base.io | defi.yby-etoro.com | ethusdt.buzz | tether-ether.com | defi.df-ethe.vip | eth-seal.vip | wealth-coin.net | defi.cb-ant.net | eth-prime.co | eth-base.biz | ethcoinb.net | allianceex.net | usdc-shop.com | eth-fossa.club | ethliquidmining9.com | nodeminer.vip | defi.defi-usd.net | usdt-pool.me" "eth-coin.vip eth-coin.info metaverss.co" "eth-coinwallet.net" "leagues.vip, ethusdt.club, eth-fun.com, smartmine.info (unverified), eth-nano.net" "eth-miner.org" "coinbasewallet.club" "Ethereum-tkn.com" "ETH-coin.mobi" "ethreum.vip" "aaveeth.co" "Integra.gold" "Eth-asic.net" "eth-nano.life" "antenjoy.vip" "eth-usdt.info" "u2e-free.com | u2e-free.net" "Tron.ac" "ETH-Vitrum" "lianfaex.com" "defi.cw-eth.net" "hydefieco.com" "defi.df-com.cc" "finacai.com | defi-lp.org" "cbeth.io, cbeth.net, cbeth.org, cbeth.vip" "eth-defi13.com" "Eth-coin.info" "Sushi-defi.com" "defimoney.info" "coin-ethgo.co" "Tether-ether.io" "stareth.co" "vip.innovationusdt.one" "tetherminning.com" "usdt-ether.cc" "ethoxt.com" "worldwallet.shop" "usdt-paypal.net"
"Once you receive the “node” that’s when you gave access to your wallet and you have been compromised."
What Happened
Multiple users reported their funds stolen after they granted permissions to various "mining pool" applications.
| Date | Event | Description |
|---|---|---|
| December 3rd, 2021 | Main Event | Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here. |
Technical Details
List Of Domain Names Affected
The fraud operated on a large number of different domain names:
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|
|
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"eth-asic.net" "eth-nano.life" "antenjoy.vip" "eth-usdt.info" "u2e-free.com | u2e-free.net" "Tron.ac" "ETH-Vitrum" "lianfaex.com" "defi.cw-eth.net" "hydefieco.com" "defi.df-com.cc" "finacai.com | defi-lp.org" "cbeth.io, cbeth.net, cbeth.org, cbeth.vip" "eth-defi13.com" "Eth-coin.info" "Sushi-defi.com" "defimoney.info" "coin-ethgo.co" "Tether-ether.io" "stareth.co" "vip.innovationusdt.one" "tetherminning.com" "usdt-ether.cc" "ethoxt.com" "worldwallet.shop" "usdt-paypal.net"
Total Amount Lost
The total amount lost is unknown.
Immediate Reactions
"Hi - I just became victim to the scam and I lost over $100,000 taken out of my Coinbase Wallet. Coinbase has zero protection as you all know and I need to find out which law firm we can contact or cyber forensics to help?"
"So For my ignorance.. I clic that button and the funds that I have got around 650 usd.. all gone to that."
"Then the chinese girl said to me that I have to deposit more money, she was so insistent...to complete the 50000 usd..and get the 5 eth reward...but I did not fund in that moment."
"Well I was thinking if I deposit more money the wallet do not drain more funds... and . I still earn passive incomes as before."
"So I tried.funding with 20 usd. .. after 2 hours .. that 20 usd remains in the wallet... so I was thinking that nothing happends if I fund more money."
"Then I deposit 2300 usd...thinking that funds stays in my wallet and keep earning as before with the node."
"But surprise.. that 2300 drain to.that smart contract.... So I have lost 2900 usd...."
"Customer service of coinbase wallet... first says that the money remains in the pool..and after 90 days it will return to my wallet.... after I ask them again.. and they told me that those funds are in the pool forever...and they do not return to my wallet."
"Searching in debank.com also in etherscan.io , the address where my money went... only have around 500 usd.. so that means that my money was gone."
"They claim that if I pay a $5000 deposit that all my funds will be wired back to my bank account. Has anyone ever attempted this to get them to send your funds back?"
Ultimate Outcome
"There's no recourse when they fraudulently steal your funds, it happened to me too, supposedly my funds will return in 90 days from date of "pledging", but I'm pretty sure it ain't gonna happen. Bottom line, do a ton of research before joining any defi platforms and do not trust COINBASE WALLET either....if ur getting this advice from Chinese girls on dating sites, seriously..the "pig butchering" scheme is so rampant rigjt now....."
"I lost $24,000 to this scam." "I lost 19k in this scam." "I just lo[s]t 80K USDT." "They con me out 63k." "I lost 70k on this type of scam." "Yes I lost 10k." "I lost 50,490 USDT." "I funded the entire 50k. And got nothing back." "I lost 28k USDT. It all started when I clicked the smart contract button." "I lost 15k, know people who lost 70k-250k range." "I got scammed out of 600k." "Lost 52k on same site cb-titan, the scammers accounts got hundred of millions of dollars & coinbase doing nothing!" "I meeting people who have lost hundreds of thousands -- same scam." "I just became victim to the scam and I lost over $100,000 taken out of my Coinbase Wallet."
Total Amount Recovered
There do not appear to have been any funds recovered in this case.
Ongoing Developments
TBD
Individual Prevention Policies
In these cases, the user is providing an unaudited platform with unlimited withdrawal access to their wallet. There is an extremely limited legitimate use case for authorizing unlimited withdrawals. Users should be checking and scrutinizing the audit status of any smart contracts that they interact with.
Every approval on Web3 is an opportunity to lose all of the funds present in your wallet. Take the time to review the transaction in full. Fully check over the balance, permissions, and entire address which you are interacting with. Do not trust that your clipboard or any website front-end is guaranteed to provide an accurate address or transaction status. Always perform a test transaction prior to the first high-value transaction in any session.
Avoid the use of smart contracts unless necessary. Minimize the level of exposure by removing or withdrawing assets whenever possible. Aim to choose smart contracts which have obtained third party security audits, preferably having been audited by at least three separate reputable firms. Pay attention to the audit reports, which smart contracts are covered, and whether the smart contract has been upgraded or modified since the report. Ensure that any administrative functions with the ability to remove funds from the smart contract are under the authority of a multi-signature wallet which is controlled by at least three separate and reputable entities.
For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.
Platform Prevention Policies
Extra education is needed for all new participants in the cryptocurrency space, which can help them understand the risks of wallet approvals to malicious applications. An industry insurance fund can assist affected users with devastating losses and help ensure that all fraud is properly reported.
Never take for granted the limited knowledge of users of your service and their tendency to skip past provided information. It is recommended to design a simple tutorial and quiz for new users which explains the basics of seed phrases, strong password generation, secure two-factor authentication, common fraud schemes, how ponzi schemes work, as well as other risks which are unique to the cryptocurrency space. This tutorial and quiz should ensure their understanding and be a standard part of the sign-up or download process which is difficult or impossible to skip.
Work with other industry platforms to set up a multi-signature wallet with private keys held separately by delegate signatories from seven prominent platforms and services within the industry. Establish requirements for contributions by all platforms and services, designed to be affordable for small platforms yet large enough to cover anticipated breach events. Any breach event can be brought forth by a member platform or a petition of 100 signatures for consideration by the delegate signatories. A vote of 4 or more delegate signatures is required to release any funds, which could partially or fully restore lost funds based on their assessment.
For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.
Regulatory Prevention Policies
Extra education is needed for all new participants in the cryptocurrency space, which can help them understand the risks of wallet approvals to malicious applications. An industry insurance fund can assist affected users with devastating losses and help ensure that all fraud is properly reported.
Create a standard tutorial and quiz for all new cryptocurrency participants, which is required to be completed once per participant. This tutorial and quiz should cover the basics of proper seed phrase protection, strong password generation, secure two-factor authentication, common fraud schemes, how to detect and guard against phishing attacks, how ponzi schemes work, as well as other risks which are unique to the cryptocurrency space.
All platforms should undergo published security and risk assessments by independent third parties. Two assessments are required at founding or major upgrade, one after 3 months, and one every 6 months thereafter. The third parties must not repeat within the past 14 months. A risk assessment needs to include what assets back customer deposits and the risk of default from any third parties being lent to. The security assessment must include ensuring a proper multi-signature wallet, and that all signatories are properly trained. Assessments must be performed on social media, databases, and DNS security.
Set up a multi-signature wallet with private keys held separately by delegate signatories from seven prominent platforms and services within the industry. Establish requirements for contributions by all platforms and services within the country, designed to be affordable for small platforms yet large enough to cover anticipated breach events. Any breach event can be brought forth by a member platform or a petition of 100 signatures for consideration by the delegate signatories. A vote of 4 or more delegate signatures is required to release any funds, which could partially or fully restore lost funds based on their assessment.
For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.
References
- ↑ “Newest one” - Liquidity Mining - USDT & ETH. “Coinbasewallet.club”. Once you receive the “node” that’s when you gave access to your wallet and you have been compromised. : eth_liquidity_scam (Jan 13, 2022)
- ↑ SCAM: coinbasewallet.club : liquiditymining (Jan 14, 2022)
- ↑ Coinbasewallet.club : eth_liquidity_scam (Jan 14, 2022)
- ↑ DApp Phishing in Coinbase Wallet - I lost over $50,000 (Jan 14, 2022)
- ↑ Ethereum Transaction Hash (Txhash) Details | Etherscan (Jan 14, 2022)
- ↑ Eth-base.io scam, They took my wallet usdt in their site and now asking me to complete 10k usdt, should I go for it or is it a complete scam? : eth_liquidity_scam (Jan 14, 2022)
- ↑ List the scam website in the comment. : eth_liquidity_scam (Jan 14, 2022)
- ↑ Coinbase Wallet Pledge Mining Scam | Ethereum Mining Scam - YouTube (Jan 14, 2022)
- ↑ Scammer from coinbasewallet.club , liquidity pool mining https://www.facebook.com/fatima.gomes.7982 : eth_liquidity_scam (Jan 14, 2022)
- ↑ Info about coinbasewallet.club... : eth_liquidity_scam (Jan 14, 2022)
- ↑ Ethereum Transactions Information | Etherscan (Jan 14, 2022)