Crypto exchange Binance’s “Red Alarm” platform has identified 50 crypto projects as potential scams or rug pulls.
What Happened: In July alone, the Red Alarm system analyzed 3,300 contracts and identified several projects that carry extremely high levels of risk, Binance’s BNB Chain BNB/USD investment director Gwendolyn Regina told Cointelegraph.
Included in this list of projects are Dogecoin DOGE/USD knockoffs and projects inspired by pandas, cyborgs and Smurfs.
Red Alarm screens through the crypto projects in real-time and assesses risk based on existing features that have historically been present in scam crypto projects.
Some of the common risks identified include blockchain contract functions that are different from what the owners advertised and logical/programming backdoors that let the owners drain users' funds.
“We will tend to put them on the ‘Red Alarm’ list to effectively warn users to steer clear or participate with caution,” Regina told Cointelegraph, adding that users are encouraged to do their own research before engaging with projects in the BNB ecosystem.
Last month, a member of the Dogecoin community issued a warning to investors to steer clear of a crypto project called “Dogechain.”
“It’s another knockoff token that is trying to be Dogecoin like many other tokens and they are paying influencers to manipulate people into believing that it is good for Dogecoin,” the warning read.
See Also: HOW TO SPOT A CRYPTO SCAM
Price Action: At press time, BNB was trading at $321, up 0.47% over the last 24 hours, as per data from Benzinga Pro.
Bitcoin (CRYPTO: BTC) was trading at $24,195, down 1.3%, Ethereum (CRYPTO: ETH) was trading at $1,900, down 2.7% and DOGE was trading at $0.079, down 1.9% over the same period.
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