Scam Tokens Flourish on Coinbase’s Base Blockchain

The post Scam Tokens Flourish on Coinbase’s Base Blockchain appeared first on Coinpedia Fintech News

An alarming report from Bloomberg uncovers the mire of scam tokens flourishing on Base, Coinbase’s new blockchain. From ‘BASEPEPE’ to ‘Baby Yoda’, scammers have exploited the openness of this network, leaving investors and regulators in the dust.

The Unfolding Scandal

According to Solidus Labs, developers deployed more than 500 scam tokens on Base blockchain, resulting in about $3.7 million in trading volume and $2 million in scammers’ profits. They achieved this feat by minting an unlimited number of coins without the users’ awareness, or simply blocking the resale of coins. 

What are the Problems of the Crypto World?

• Investment Failures: Lack of regulatory oversight, consumer protections, and transparency makes crypto fail as an “investment.”
• Marketplace Distortions: Misleading trades, double counting, and lost coins distort traditional data points like market capitalization.
• Financial Inclusion or Exclusion?: Crypto’s promise to help the unbanked has fallen short, exacerbating issues for disadvantaged and disaffected communities.

How is the Crypto World becoming a criminal playground?

• US Law Enforcement Struggles: Crypto presents complex challenges in identifying and prosecuting criminals.
• A Tricky Trail to Follow: The myth of easy crypto-tracing is debunked. Many tools exist to obscure and camouflage transactions.
• Reports and Findings: U.S. Treasury Department and U.S. DOJ reports highlight the difficulties in tracking crypto, with obfuscation techniques and non-compliant platforms.

Coinbase’s Role: Facilitator or Perpetrator?

Crypto’s volatile nature, combined with Coinbase’s alleged reckless profiteering, poses significant risks. Accusations that Coinbase is not just facilitating the chaos but doing so at retail investors’ expense. Coinbase’s failure to register with the US SEC as an exchange, broker-dealer, and clearing firm adds to the concerns.

The unfolding scandal around Coinbase’s Base blockchain is not an isolated incident but a manifestation of the inherent chaos and vulnerabilities within the crypto ecosystem. The exposure of these hundreds of scam tokens on Base must serve as a wake-up call to both investors and regulators. The current scandal might just be the tip of the iceberg, a telling sign of the underlying storm threatening to engulf the crypto world.