Fake MetaMask Governance Token Soars 2600% and Gets Rug-Pulled

The cryptocurrency market is considered to be extremely unstable due to the influx of fraudsters. Since it’s a free market, there are few chances that you could be caught doing anything illegal unless a regulated authority glues its eyes on you. For this reason, there has been a sudden rise in fraudulent activities in the crypto community.

The most common type of fraudulent activity is a rug pull that absolutely dismantles the shareholders of a specific project. Stay tuned to find out more about rug pulls and the latest rug pull event on MetaMask.

What is MetaMask?

MetaMask is one of the most popular digital wallets in the crypto community. Since it is one of the most promising non-custodial wallets for Ethereum, it is used by a large amount of crypto HODLers.

Fake MetaMask Governance Token Gets Rug-Pulled

According to recent rumors, MetaMask has become the hub of several fraudulent activities. Recently, scammers were able to launch a fake MetaMask Governance Token with a ticker MASK that symbolizes itself as MetaMask’s primary token.

The coin was launched on UniSwap, one of the most popular exchanges in the community. Since UniSwap has extremely high processing fees due to the primary currency being Ethereum, people believe that the platform only allows verified projects. However, scammers manage to sneak through the enhanced security levels of the exchange and initiate their fraudulent activity.

In the case of MASK, scammers managed to inflate the price of the token to a whopping 2600% from its launch price. This price hike was detected by frequent day traders and they managed to get in on the trade by purchasing the token at higher prices resulting in the price increasing continuously. However, when the token reached a total of over $9 million, the liquidity was pulled by a chain of anonymous addresses which were unable to be traced back to their original owners.

This left the shareholders with a massive drop in their token holdings and eventually resulted in a $9 million collective loss. Incrementing as just another loss in the list of numerous losses in the crypto world.

What are Rug-Pulls?

For those of you who are unaware of the concept of rug-pulls, here is a simple explanation. Rug pulls can be classified into two major types:

• Developers Cashing Out

Consider a project developed by an individual or team of malicious developers that originally planned to run away with total liquidity.

• Disabling the Ability to Sell Tokens

In this type of rug pull, investors tend to purchase pseudo digital currency which has underlying code attached by the malicious developers that restrict the buyers from selling them back to the exchange. After the token reaches a sufficient amount and the developers have access to a sufficient amount, they pull out all of the investments leaving the HODLers with massive losses.

How to Avoid Getting Rug-Pulled?

Research about the token before jumping into trading it. It’s a no-brainer that the crypto community can pretty much hype anything. So make sure you don’t become a part of the herd and follow every project blindly. This will ensure that you don’t become a part of a disastrous trade.