It’s not a secret that, unfortunately, scams occur in the cryptocurrency space much more often than they should. What’s worse is that most of the time, those affected are innocent crypto holders who were somehow misled into handing their funds over to a malicious actor.
However, a new kind of scam turns the typical crypto scam narrative on its head. In a so-called ‘Honeypot’ scam, the targets are the very same malicious actors who seek to take advantage of someone who doesn’t know any better.
Culprit Tricked Wannabe Thieves Into Sending a Steady Stream of ETH
In what may have been the first scam of its kind, the culprit publicly posted their private key to a MyEtherWallet in a chatroom; inside of the wallet lay $5000 worth of ‘Minereum,’ (MNE) the native token of a blockchain network that describes itself as “the first self-mining smart contract.”
Minereum was particularly well-suited to the scam because of its status as “a project that’s slowly dying but has a constant low value so it can be sold on an exchange for at least $4000,” according to Bitfalls, who was the first to report the incident.
Best scam I’ve ever seen:
1. Guy posts his MEW private key in a chat.
2. $5k worth of Minerium in it, no ETH for gas.
3. Half the people in the chat send gas to take it.
4. Smart contract. Auto-sends the $ETH to another address; keeps MNE in the account.
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— The Shitcoin Sherpa (@ShitcoinSherpa) April 12, 2018
Immediately after the private address was posted, other participants in the chatroom scrambled to extract the MNE tokens from the wallet.
A Smart Contract Redirected Funds Into a Second Wallet
The wannabe thieves had no idea what they were in for. Although the wallet did contain $5000 worth of MNE, the wallet didn’t have a single shred of ETH to pay for the ‘gas’ necessary to process transactions on the Ethereum network.
Therefore, in order to successfully extract the MNE tokens, the thieves needed to send ‘gas’ in the form of ETH tokens. What they didn’t know was that the mastermind behind the scheme had coded a script that automatically sent the incoming ETH to another address.
Essentially, this made it so that a continuous stream of ETH was redirected into the second wallet. Because the ETH never actually made it into the wallet that contained the Minereum, the MNE tokens remained safely in the wallet without enough ‘gas’ to send them out. At press time, the second wallet had collected ~0.72 of ETH, worth roughly $300.
Well played, honeypot master. Well played.