DeFi wallet scams escalate: from brute force plundering to carefully laid traps

Scams Are Evolving, and Your Wallet Faces New Threats

The cryptocurrency market has surpassed a total value of $3.89 trillion, but behind this prosperity lies a dark reality—fraud incidents in the DeFi space are growing exponentially. On November 14 alone, 31 scam cases occurred, with total losses reaching $15 million that month. These figures reflect that scammers’ tactics have evolved from simple brute-force methods to carefully crafted traps.

What is most alarming is that although individual scam amounts are often small (most under $100,000), the sheer volume and complexity pose a systemic threat to the entire DeFi ecosystem. Allen Zhang, co-founder of Web3 cybersecurity firm GoPlus, pointed out that since November, over 5,688 “honeypot token” scams have been identified—highlighting the severity of the issue.

New Tricks in DeFi Wallet Scams: Multi-Wallet Control Strategies

Modern scammers have abandoned easily recognizable brute-force tactics. They now employ complex multi-wallet control strategies, making it difficult for ordinary investors to assess risk based on token concentration. This means a token that appears to be dispersed across many wallets could actually be entirely controlled by behind-the-scenes operators.

Michael Heinrich, co-founder of 0G Labs, revealed an unsettling phenomenon: current scam projects now resemble legitimate startups. Carefully designed marketing narratives, professional promotional copy, false partnership announcements—all are crafted to be nearly perfect, aiming to trap unsuspecting investors.

The lack of effective identity verification mechanisms allows malicious developers to easily create and promote fraudulent tokens without revealing their true identities, making it difficult for regulators and users to hold them accountable.

Case Warning: How the Prosperity of PNUT Became a Breeding Ground for Scams

The story of Peanut (PNUT) memecoin is a textbook example. After launching on November 1, the token’s price skyrocketed 161 times within just seven days, attracting many retail investors. But this extreme growth also drew scammers—who created hundreds of fake versions of PNUT tokens, siphoning off over $103,000 from unwary followers.

This is not an isolated incident. Pump.fun, a platform on the Solana ecosystem that allows users to freely create and issue memecoins, has become a hotspot for DeFi wallet scams. Heinrich revealed startling data: up to 90% of wallets on Pump.fun are interconnected. Developers inject funds, use trading bots to inflate prices, and then liquidate retail investors—all within hours. One 13-year-old even earned $30,000 live on stream through such schemes before dumping tokens on unsuspecting investors.

Front-Running Bots: The Invisible Noose for DeFi Wallets

The most insidious development is the weaponization of front-running bots. Originally used to monitor mempool transactions, scammers have repurposed these tools into automated plundering devices. Steven Walbroehl, co-founder of Halborn, explained that these bots can automatically detect new token listings and execute rapid buy orders to jump ahead of regular investors.

Scammers have developed specialized automated token issuance strategies to counter these bots, creating an ongoing “arms race.” The result: front-running bots help scammers create false demand, attracting more investors and ultimately enabling large-scale DeFi wallet scams.

Psychological Manipulation: How FOMO Is Exploited

Technical methods are only the surface. The real killer is psychological manipulation. Ben Caselin, Chief Marketing Officer of VALR, pointed out that most crypto traders have become accustomed to the high-risk nature of the market—they are essentially gambling—investing small amounts across many low-market-cap tokens hoping for quick gains.

This mindset provides a perfect breeding ground for scams. Scammers are adept at exploiting FOMO (Fear of Missing Out) through coordinated social media marketing, fake success stories, and fabricated celebrity endorsements to drive impulsive investment decisions. Kate Shen of Anaxi Labs observed that some savvy scammers even repeat the same tactics across multiple projects, targeting new victims each time.

Even more concerning is the normalization of fake brand associations. Walbroehl mentioned “Lego carpet pulling”—a deceptive tactic where a project falsely claims affiliation with a well-known brand like Lego to gain credibility and attract investors.

Defensive Countermeasures: How to Protect Your DeFi Wallet

In response to this wave of scams, the security community has begun complex countermeasures. Anaxi Labs and Carnegie Mellon University’s CyLab have developed algorithms to streamline blockchain components and enhance transparency. GoPlus launched the SafeToken protocol, offering standardized security templates to reduce fraud caused by malicious code.

Nanak Nihal Khalsa, co-founder of Holonym, recommends that crypto wallets integrate automated code scanning tools to perform smart contract audits before transactions. “This protection cannot be handled solely at the user level but can be implemented at the wallet level. Wallets should go beyond transaction simulation and include code auditing functions.”

Heinrich emphasized that DeFi platforms must cooperate with reputable third-party auditors and encourage open-source code on platforms like GitHub. Most importantly, deployed contracts should be immutable—serving as the last line of defense against developers “changing sides.”

Recognizing Red Flags: Token Concentration and Fake Liquidity

Investors can identify potential DeFi wallet scams through the following signals:

Token concentration is the most critical warning sign. Khalsa pointed out that scammers control multiple seemingly independent wallets to create a false appearance of decentralization. They can now easily forge ERC-20 token contract data, falsely claiming supply and user balances. While these tricks can be detected, ordinary users often cannot.

Tools like Etherscan and Token Sniffer can help flag tokens dominated by a few top wallets. If token supply is highly concentrated or liquidity is abnormally low, these are dangerous signals. Projects with minimal community distribution are especially vulnerable to scams.

Conclusion: No Perfect Defense, Only Continuous Vigilance

While it’s impossible to eliminate all risks, combining education, technological innovation, and community responsibility can significantly reduce the chances of falling victim to DeFi wallet scams. The key is to recognize how advanced these scams have become, understand scammers’ new tactics, learn to identify risk signals, and always remain cautious of unfamiliar projects.

In this opportunity-filled DeFi world, the best defense is making scammers realize—investors are learning to be smarter.