Introduction
Lucky Star Currency (LSC), a Binance Smart Chain-based altcoin token, recently became the victim of a rug pull, as reported by blockchain security firm PeckShield. This incident has cast a harsh spotlight on the growing number of malicious scams prevalent in the cryptocurrency and DeFi industry.
The Rug Pull
The developer of LSC, a relatively new crypto token, executed a rug pull, siphoning off $1.11 million from unsuspecting users. This abrupt action caused the value of LSC to plummet to nearly zero. Monitoring site Beosin Alert shared the alarming news on Twitter, stating that Lucky Star Currency’s price dropped from $2.8 to a mere $0.04.
The Scam Details
The fraudulent entity behind the rug pull managed to dump a total of 3 million LSC tokens from two separate contracts, securing a profit in Binance USD (BUSD). Transaction records reveal that one address sent approximately 1.4 million tokens to the exit address, while another address was responsible for 1.65 million tokens.
Current State of LSC
As of the latest update, LSC tokens are trading at $0.01036, with a market capitalization of $101K. This marks a significant decline from its previous market cap of $28.7 million.
The Rising Trend of Rug Pulls
Rug pulls or exit scams occur when deceptive developers create a new cryptocurrency token, artificially inflate its price, drain investor funds, and then disappear, leaving investors with worthless tokens. According to a 2022 report by blockchain risk monitoring firm Solidus Labs, 15 new scam tokens are detected every hour, leading to almost two million investors losing funds to rug pull schemes. The report also highlighted that “12% of all Binance Smart Chain-based tokens are rug pulls.”
Recent data from Datawrapper, a database of cryptocurrency rug pulls and scams, reveals that there have been four reported crypto rug pulls in the current month alone. One notable incident involved the CommEx token, where the developer orchestrated a liquidity withdrawal, resulting in a rug pull that drained approximately $154,000 worth of investor funds.
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