Cyber Crime
In this blog we reveal malevolent actors utilizing the 2024 Olympics to entice victims into investing in an initial coin offering (ICO). Comparable tactics have been identified to use AI-generated visuals for their deceptive ICO portals.
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Main points:
- Malevolent actors are using the 2024 Olympics to entice victims into investing in an initial coin offering (ICO).
- Comparable tactics have been identified to use AI-generated visuals for their deceptive ICO portals.
- More ICO frauds utilizing AI-generated content can be expected in the future to maximize the tool’s cost-and time-efficiency in creating more convincing lures.
Cybercriminals are using the hype around the forthcoming 2024 Olympics to target victims in a recent series of scams exploiting major events to grab the public’s interest and attention. This blog aims to expose initial coin offering (ICO) scams that exploit interest in the games scheduled in France from July 26 to August 11.
Cryptocurrency is here to stay, but the average internet user has yet to fully grasp its concept. Cybercriminals exploit this unfamiliarity by creating ICO frauds designed to steal money from victims by offering a chance to invest in cryptocurrency and then running away with their money.
Would-be investors are enticed to purchase new cryptocurrency tokens through established cryptocurrencies such as Bitcoin or Solana, supposedly to develop a project that will generate profit and promise returns to the investor. However, the promise never materializes, cybercriminals later vanish with their investors’ money along with any evidence of the ICO fraud ever existing: the website disappears, as well as the social media accounts involvedto it. Victims are left with no method to reclaim their investment. Additional frauds utilize a liquidity rug-pull: within this strategy, tokens created need to be paired with another established token, like Ethereum or Solana, and then are showcased as a liquidity pool on a Decentralized Exchange (DEX). Once a sufficient number of victims have contributed funds to the pool, the cybercriminals withdraw a majority of the liquidity, resulting in a sharp decline in the token’s value and leaving the investors with valueless assets.
The Olympic Token ICO deception
The domain name theolympictoken.com was registered on March 30, 2024, and its webpage was launched a day later, introducing an Olympics Games Token, a digital asset that any online user can opt to invest in. As depicted in Figure 1, the website is uncomplicated and direct; it even features a project roadmap, albeit a vague one. It claims affiliation with the International Olympic Committee and employs the Olympics 2024 logo, complete with a countdown to the event. It presents investors with the opportunity to trade tokens on Raydium, a reputable cryptocurrency exchange. It is important to bear in mind that having the ability to transact a token on trustworthy exchanges does not guarantee the legitimacy of the token itself, given that numerous exchanges permit users to establish and remove liquidity for any tokens.
The counterfeit ICO site also directs users to a whitepaper, but the link does not lead to an authentic whitepaper detailing the project; instead, it redirects to the legitimate olympics.com website. This deviation is an immediate warning sign: genuine ICOs consistently present a whitepaper elucidating the core concept of the project.
An X (previously known as Twitter) account controlled by the cybercriminals commenced promoting the website simultaneously with its launch. A Telegram channel was also actively persuading its members to purchase what it terms as Olympic Games Token (OGT) with a sense of urgency. It is suspected that the cybercriminals likely leveraged additional social media platforms to entice individuals to visit the fraudulent ICO website or the Telegram channel. ICO scams commonly follow this pattern: once the deceitful site is live, aggressive promotion occurs on social media, forums, and other online platforms to drive traffic and potential victims to invest in the project.
A couple of days after its domain registration, the webpage was deactivated, but there are suspicions that the culprits behind the scheme have initiated operations under a fresh website, olympictokensolana.com, which mirrors precisely the content of the initial phony ICO site.
Alternate Olympics-related digital currency frauds
Throughout our recent monitoring efforts, we have come across at minimum ten other platforms seizing upon the 2024 Olympics to draw victims into ICO scams; a few of them were promptly taken down upon detection.
Not only are these sites crafted well enough to appear authentic, but we have also observed the utilization of AI-generated imagery. Yet, it appears that ICO scam websites lacking roadmap specifics or whitepapers are the ones that compensate with AI-generated visuals.
One can speculate that integrating AI-generated content is the more economical and efficient choice for fraudsters, as developing a website that is convincing enough to captivate victims demands time and expertise. While cybercriminals can resort to lifting images, design elements, and content from an existing legitimate site, this approach may not be as appealing since potential victims might discern the deception upon identifying the duplicated content.
AI has become progressively valuable to cybercriminals in formulating text for their phishing endeavors, rectifying spelling and grammatical mistakes, and even producing phrases in languages unfamiliar to fraudsters. In the ICO scams under scrutiny, we have observed no less than three distinct ICO scam websites elevating AI implementation by generating visuals and layouts for their webpages. It is believed that more scams and cybercrimes will soon embrace the integration of AI-generated artwork.
Conclusion
Initial coin offerings (ICOs) have garnered significant attention as digital currency gains traction in various sectors. Generating a new token on the blockchain has become simpler and more cost-effective, particularly with the availability of suitable tools for all. On-chain data reveals that over a million new tokens have emerged across different blockchains in recent months. While many of these fresh tokens lack practical use and are merely memecoins (cryptocurrencies often crafted as jests or linked to memes or popular incidents), it does not necessarily denote fraudulent intent. Although a significant number of new coins are either fraudulent or susceptible, they cannot be definitively classified as such until a deceitful scheme unfolds. While the instances detailed in this article pertain to memecoins capitalizing on the buzz surrounding the 2024 Olympics, some have been exposed as frauds.
There have been numerous reported cases of deceptive ICOs, particularly during the ICO boom in 2017. The prevalence of deceitful activities in the Solana presale and memecoin sphere underscores the importance of caution when engaging with new ventures. Even if a memecoin isn’t deceptive, it’s crucial to acknowledge that these tokens are highly volatile, leading to substantial price fluctuations. Consequently, investors must exercise prudence and conduct thorough research before investing in any form of digital currency, especially memecoins.
Those involved in crypto investments should remain vigilant and watch out for potential frauds and sudden fund withdrawals. A legitimate ICO should encompass:
- Well-designed website and active social presence: A polished, professionally crafted website coupled with an engaged social media presence signify authenticity. Scams commonly employ shoddily designed websites and inactive or counterfeit social media profiles, while legitimate projects typically maintain an active online presence to interact with their audience.
- Transparent team: Authenticate the identities and qualifications of the individuals steering the token. Anonymity or unverifiable team members could raise suspicions. Reputable projects usually disclose the team members’ identities and backgrounds.
- Engaged community: Seek out an interactive and vibrant community on platforms like Discord, Telegram, or Twitter. A robust community indicates genuine interest and backing, whereas scams often exhibit minimal community engagement or fabricated interactions.
- Comprehensive whitepaper: Ensure the token offers a detailed whitepaper outlining its objectives, usage, and technical nuances. A meticulous whitepaper underscores the project’s seriousness and planning, while scams often present vague or plagiarized whitepapers.
- Claim legitimacy: Validate the token’s assertions, including their affiliations, partnerships, real-world implementations, and endorsements. Fraudulent entities frequently make baseless claims to entice investors, necessitating verification to differentiate between authentic and deceitful projects.
- Token distribution: Assess the token’s equitable distribution, avoiding excessive concentration in a few wallets. Excessive token centralization may indicate susceptibility to manipulation and sudden fund withdrawals.
- Smart contract audit: Confirm whether a reputable third-party has audited the smart contract. Audits identify vulnerabilities and bolster trust, while the absence of an audit or a subpar audit could signal potential risks.
- Liquidity management: Verify if the liquidity is securely locked to prevent premature developer withdrawals and evaluate whether the bulk of the liquidity is controlled by developers or distributed within the community. Locked liquidity safeguards investor assets and minimizes the risk of abrupt fund withdrawals, while decentralized liquidity control fosters trust and reduces the likelihood of developer manipulation.
Regarding the Olympic Games Token, the concerning aspects encompass the suspicious website presentation, a meager token holder count, and an insubstantial whitepaper. Investors and cryptocurrency enthusiasts should exercise extreme caution and adhere to the outlined criteria to evade falling victim to such scams.
The domains associated with the fraudulent activities discussed here have either vanished, been suspended, or lack content. All identified domains linked to the fraud deliberated in this piece have been blocked by Trend Micro.
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