Over 500 scam tokens on Coinbase’s Base blockchain have thrived, making $3.7 million in trades and $2 million in profits. These tokens use tactics like hidden coin creation, shedding light on crypto chaos, law enforcement challenges, and potential risks for retail investors.
A concerning Bloomberg report reveals the presence of scam tokens thriving on Base, Coinbase’s recent blockchain. Scammers are taking advantage of the platform’s openness, using names like ‘BASEPEPE’ and ‘Baby Yoda’, causing concerns for investors and regulators.
Coinbase has failed to register with the US SEC as an exchange, as a broker dealer and as clearing firm. Here is my opinion, together with an easy-to-understand example, of why this is (really) bad.
Per a report today from Bloomberg, token scams are flourishing on Base, the new… pic.twitter.com/uZDwfzxUbU
— John Reed Stark (@JohnReedStark) August 17, 2023
Solidus Labs reported that over 500 scam tokens were created on the Base blockchain, leading to around $3.7 million in trading activity and about $2 million in profits for scammers. They managed this by making countless coins without users knowing or preventing coin resale.
What’s Troubling the Markets?
- Challenges in Crypto Investment: Lack of rules, safety measures, and clear information undermine crypto’s value as an investment.
- Market Manipulation: Deceptive trades, inaccurate data, and lost coins distort key indicators like market size.
- Unfulfilled Promises: Crypto’s aim to help marginalized groups with banking access falls short, worsening their situation.
Rising Criminal Concerns:
- Law Enforcement Struggles: Catching crypto-related criminals poses intricate problems for law enforcement.
- Tracking Troubles: Easy tracing of crypto transactions is a myth; many methods exist to hide and confuse.
- Official Reports: U.S. Treasury Department and U.S. DOJ findings highlight crypto’s tracking challenges due to tricks and non-compliant platforms.
Coinbase: Enabler or Participant?
The unpredictable nature of cryptocurrencies, combined with allegations of irresponsible profit-making by Coinbase, brings substantial dangers. Claims suggest that Coinbase isn’t merely assisting disorder but doing so at the expense of everyday investors. Additionally, Coinbase’s failure to officially register with the US SEC as an exchange, broker-dealer, and clearing firm adds more concerns.
The unfolding controversy surrounding Coinbase’s Base blockchain isn’t an isolated event, but a representation of the inherent instability and vulnerabilities within the crypto realm. The exposure of numerous scam tokens on Base should be a wakeup call for both investors and regulators.
The current issue might be just the beginning, indicating the hidden turmoil that threatens the entire cryptocurrency sphere.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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