Solana Scammers Are Burning Tokens from Inside User Wallets

Coinspeaker
Solana Scammers Are Burning Tokens from Inside User Wallets

Scammers operating on the Solana (SOL) blockchain have found a way to exploit accounts by burning SOL tokens from user wallets. According to reports, scammers can burn tokens within a few seconds of a successful purchase.

A member of the Jupiter Core Working Group, which is based on the Solana network, highlighted the situation. In an X thread, Slorg wrote:

“Imagine you swap for a token and the wallet history confirms that you received it. But then you look inside and nothing shows up.”

Slorg explained that a Jupiter Community Member experienced this and reached out for help. An investigation via the Solscan explorer platform revealed that a burn transaction occurred “only 7 seconds” after the swap. This indicates that the swap was successfully completed, but tokens were burned right after.

An image in the thread shows that the user’s assets were swapped for a “RED” token with a “Permanent Delegate” extension. According to Solana’s website, “the permanent delegate extension allows a permanent delegate for all tokens of the mint. This means one address is capable of transferring or burning any token of that mint, from any token account. This makes the extension very powerful but can also be very risky. It gives a single address complete control over the token supply.”

Solana explains that while the feature works for refunds, automatic payments, and recovering drained wallets, it is a “double-edged sword” that can be stolen or abused.

The decision to burn tokens instead of steal them may be confusing as enrichment is the goal for most scams. However, Slorg has offered possible reasons why scammers may choose to burn tokens instead of transferring them. The first reason is “generalized mayhem”. For some, the goal is simply to perpetuate destruction and chaos, nothing more.

The other possible suggestion is simply market influence – to manipulate token supply and influence price action:

“If someone can’t sell, the price won’t decrease. Many of the times scammers snipe most of the initial supply and the thing is they don’t need more than $50 in profit to make it worthwhile.”

In March, the core developer of a new Solana-based meme coin, Slerf (SLERF), accidentally burned 50,000 SOL tokens worth over $10 million at the time. According to an X post, the tokens were set aside for a planned airdrop. However, since mint authority was already revoked, minting them was impossible.

However, the developer got some respite. According to data from blockchain analytics service LookOnChain, a crypto whale purchased SLERF tokens with about 9,894 SOL and then sold the SLERF for 25k SOL. This helped the trader earn 15,107 SOL, worth more than $3 million, in only 12 minutes. The activity brought significant action back to the SLERF ecosystem.

In response to the incident, and to support the SLERF community, crypto exchange BingX announced that it would donate trading fees from SLERF spot trades on the platform. It also promised to airdrop BingX World doubt tokens to all addresses that registered for the private sale and did not receive tokens.next

Solana Scammers Are Burning Tokens from Inside User Wallets