While the blockchain industry is experiencing exciting advances, marked by the rollout of PayPal USD (PYUSD), a new dollar-backed stablecoin, a troubling shadow is looming. Indeed, malicious individuals are lurking behind the scenes, introducing fake tokens bearing the name of PayPal’s new product (PYPL), with the intention of deceiving users.
Scammers exploit fake PYUSD tokens
New York’s renowned financial company, PayPal made a surprising reappearance after abandoning the project last February. She has just unveiled her stablecoin PYUSD, created in partnership with Paxos on the Ethereum blockchain. Unfortunately, this announcement seems to benefit scammers.
According to an article published by Coindesk this Tuesday, August 8, scammers issued several fake PayPal USD (PYUSD) tokens on various blockchains shortly after PayPal’s official announcement. The aim of this maneuver is to exploit the buzz around the PYUSD by misleading investors.
Only eligible US PayPal customers can access stablecoin. However, some ill-intentioned individuals are already seeking to entrap unsuspecting users by offering counterfeits on decentralized exchange platforms (DEX). Indeed, according to data provided by DEXTools more than 66 of these fake tokens have been detected on networks such as Ethereum and BNB Chain, during the morning of Tuesday.
Some of these fake tokens cannot be traded after purchase, while others can be taken off the market at any time. Furthermore, wash trading takes place to deceive users, i.e. the creators drive trading volume to create an illusion of demand. Most of these imitations have been identified on the Ethereum network, where the real PYUSD is in circulation.
Concerns about PayPal’s stablecoin in the community
The announcement of the launch of the PayPal stablecoin has not been welcomed by some members of the community, who are expressing concerns about the safety and security of this new coin.
Indeed, one observer has drawn attention to worrying elements of the PYUSD code, revealing asset freezing functionality via the “freeze” function and the ability to empty a user’s balance with “wipeFrozenAddress”.
These elements have prompted criticism including the lawyer Sasha Hodder who compares PayPal’s stablecoin to a central bank digital currency (CBDC) with censorship capabilities, emanating from a technology company rather than a government.
In anticipation of any forthcoming news, it’s vital to maintain vigilance by taking the time to thoroughly check the authenticity of tokens before initiating any transactions. To do this, check the address of the smart-contract corresponding to the token and cross-check with official sources.
Finally, the PYUSD smart-contract is not completely decentralised today, insofar as a central entity can wipe out the balance or block exchanges from any address.
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.