Scammers have reportedly found a new method of rug-pulling in the world of Solana — this time, by burning tokens from users’ wallets just seconds after a purchase.
According to reports, users are buying tokens, only to find that their wallet balances don’t reflect the transaction. While the wallet history may confirm the receipt of tokens, users are left staring at empty balances. The tokens appear to vanish without a trace, and no amount of refreshing or re-checking seems to solve the issue.
Slorg, a member of Solana-based Jupiter’s Core Working Group, shared this concerning discovery in a Sept. 3 post on X (formerly Twitter), explaining that scammers have found a way to use Solana’s token extension to secretly delete the purchased crypto.
The Sneaky Trick Behind the Token Burn
Slorg detailed a particular case where a user swapped for a token called “RED”, only to have all the tokens burned seven seconds after the transaction went through. The token involved was equipped with a “Permanent Delegate” extension, a feature within Solana’s Token 2022 standard.
According to PeckShield, the Permanent Delegate extension allows malicious actors to execute unrestricted actions on all token accounts for a specific mint. This includes the ability to burn or transfer tokens without any limitations. While this feature was originally designed for legitimate use cases — like recovering mistakenly sent tokens or ensuring compliance with sanction regulations — it can easily be exploited for nefarious purposes. Solana itself acknowledges that this extension is a “double-edged sword” that could be abused, and unfortunately, that’s exactly what’s happening here.
Why Would Scammers Burn Tokens?
So why would scammers want to go through the trouble of burning tokens instead of just stealing them? Slorg shared a few possible reasons:
- Creating Chaos: Sometimes, scammers just want to cause destruction and mayhem. Think of it as a digital prank or a malicious way to say, “Take that!” It’s a form of chaos that can disrupt the market or cause confusion among users.
- Manipulating Token Supply: By burning tokens, scammers can reduce the circulating supply of a token, preventing others from selling it. This tactic is a sneaky way to keep prices from dropping. Often, scammers will buy up a large chunk of the initial token supply, and with just a small amount of profit — sometimes as little as $50 — they can make the whole scheme worthwhile.
Slorg noted that he observed a scammer last November, who was launching multiple tokens per day, each raking in $50 to $100 in profit. While not highly efficient, this tactic is one that scammers seem to experiment with regularly.
PeckShield also suggested that these manipulations could be attempts to mess with the tokenomics of a project, especially by altering the circulating supply of tokens. Meanwhile, Beosin speculated that by burning users’ tokens, scammers could trick others into thinking that the token’s supply remained stable, boosting its price and allowing them to profit from related DeFi protocols.
How to Protect Yourself from This Scam
Slorg emphasized that due diligence is crucial when interacting with new tokens. The key takeaway? Always be cautious and have a set routine when making swaps or purchases. Take the time to read every detail and double-check everything before committing to any transaction. This extra step might seem tedious, but it could save you from costly mistakes — especially as new token capabilities emerge.
Jupiter and RugCheck are two platforms that have created indicators to help detect when the Permanent Delegate extension is turned on. By keeping an eye out for these indicators, users can at least be aware of the potential risks involved when interacting with certain tokens.
More Victims Speak Out
As Slorg noted, others have also reported falling victim to similar scams recently, which suggests that this form of attack is becoming more widespread. The emergence of new, easily-abused features like the Permanent Delegate extension underscores the need for continued vigilance within the Solana ecosystem and the broader crypto community.
With token innovations growing every day, the methods used by scammers are becoming more sophisticated. So, whether you’re a seasoned crypto user or just starting out, it’s crucial to stay alert and informed to avoid falling prey to these new tactics.
