An unidentified individual has been discovered to have generated an entire ecosystem, including 21,877 Sybil wallets, its own token, and even a decentralized exchange (DEX), to falsify on-chain activity.

DeFi Analyst Exposes Fake On-Chain Activity Scheme

According to DeFi analyst @lingland09, the individual funded each of his wallets with small amounts of ether (ETH), then deployed a smart contract for a non-open sourced token referred to as gemstone (GEM).

Warning: 21877 sybil wallets by one person #zkSync

Let’s disclosure this individuals sybil tactics, he funded all of his wallets with very small amounts of ether, then he deployed Gemstone ( $GEM ) token that wasn’t open source. (https://t.co/UXS2O2fivg)
++ pic.twitter.com/firJbfcdfL

— Lingland 09. ∎ (@lingland09) September 10, 2023

After the token was launched, the schemer developed a personal DEX, slowly carrying out transactions between his wallets to create the illusion of actual activity. The transactions were cleverly spread out over different months, weeks, and days to mimic the behavior of other L2 projects.

Once operational, the DEX was used to add liquidity to the GEM tokens with a fund of 80 ETH, artificially inflating the token’s value.

“Then he swapped $gem tokens that he claimed from 21877 wallets at gem/eth pair and gained 0.6- 0.7 eth value of profit.” @lingland09 revealed.

This person also used the same liquidity repeatedly, avoiding any negative effects from price slippage. As a result, they managed to execute transactions on the zkSync Era network with minimal expenses.

The individual also created a trading bot to automate the process, generating ten transactions with a total volume of $10,000 on the zkSync Era network. Notably, the analyst could only trace some of the fake wallets.

“Zkscan Explorer only supports 1k pages of history for each contract. Thus, I’ve only been able to trace 10k wallets tied to this individual’s operation,” @lingland09 stated.

However, @the_matter_labs was able to identify all 21,877 fake Sybil wallets linked to the $gem token contract.

Suspicious Activity Linked to Alleged Fake Airdrop

The motive behind the actions remains unclear. However, the analyst speculates that the individual is a “professional airdrop hunter,” possibly preparing for a fake airdrop by creating activity on the zkSync Era network.

Airdrops, a common marketing tactic in the cryptocurrency world, are exploited by Sybil attackers to defraud users. Airdrops involve distributing free tokens or coins to create interest. In a Sybil attack, the attacker creates multiple fake accounts posing as real users with the aim of taking advantage of other users.

A recent such example is the March ARB governance token airdrop by Arbitrum, which encountered issues due to an increase in Sybil activity caused by ineffective detection rules. According to crypto security researcher X-explore, over 279,328 same-person and 148,595 Sybil addresses exploited these flaws.

The post Airdrop Hunter Reportedly Fakes On-Chain Activity with Over 21,000 Sybil Wallets appeared first on CryptoPotato.

PayPal has launched a new off-ramp service that will allow users to convert crypto into USD directly from their wallets to their PayPal account. According to the official announcement, the new service is live on Metamask as of today. However, the service is only available to U.S. customers at the moment. The service aims to simplify how wallets, dApps, and NFT marketplaces enable buying and selling. The official press release stated:

“By adding Off Ramps, crypto wallet users in the U.S. can convert their crypto to USD directly from their wallets into their PayPal balance so they can shop, send, save, or transfer to their bank or debit card.”

The firm also said that users can benefit from its robust security controls and tools for fraud management, chargebacks, and disputes. The latest service is an extension of PayPal’s “On-Ramps,” which enable U.S. consumers to directly buy crypto via the platform. The On-Ramp service is currently only available through integrations with Metamask and Ledger. However, the firm has said that more wallets will be available soon.

Also Read: Ex-PayPal President Turning Bitcoin Into ‘Global Payment Network’

The launch follows Metamask’s latest feature, which allows users to cash out digital assets for fiat and send them to a bank account or PayPal account.

PayPal going big on crypto

PayPal recently became the second major company to enter the stablecoin arena with the launch of its PYUSD coin. However, it should be noted that although Meta was the first major company to enter the stablecoin realm, their venture ended in failure. PayPal, on the other hand, is seeing quite a bit of success with its stablecoin initiative.

Also Read: PayPal’s Stablecoin PYUSD Can Succeed Where Facebook Failed

Furthermore, PayPal has made significant developments to include crypto services for its customers. It is possible that the firm is confident about the future growth of the sector and anticipates more and more people opting for crypto and stablecoin payments in the near future.