FBI Flags $5.6B Crypto Scam Scourge: How Noti Sniping Tool Protects You from Fraud

If investing in cryptocurrencies has crossed your mind, you’ve probably thought about the risks associated with this new asset class — the biggest being scams.

In September 2024, the U.S. Federal Bureau of Investigation (FBI) released its annual Cryptocurrency Fraud Report, indicating a staggering $5.6 billion loss in the previous year, 71% of which was attributed to digital asset investment fraud. This is not to mention the over $4 billion in crypto scam losses that prompted the Australian police in August 2024 to join an international blockchain security campaign to crack down on “approval phishing scams.”

These statistics illustrate the constant need for caution when investing in cryptos. The likelihood of generating explosive returns from these assets and their ability to bypass the safeguards or bottlenecks of the traditional financial system have made them irresistible to malicious actors. Moreover, the lack of clear crypto regulatory oversight in most jurisdictions means scammers often go scot-free, leaving their victims stranded and reeling from unimaginable losses.

With this in mind, it will help if you take a proactive approach to mitigate potential risks. This means leveraging crypto trading tools and platforms that put you a step ahead of the bad guys, like the Noti sniping bot. As the Institute for Critical Infrastructure Technology exec James Scott puts it, “There’s no silver bullet with cybersecurity; a layered defense is the only viable option.” Here is how Noti provides this much-needed layered defense in a volatile industry often compared to the Wild West.

Noti As Your Layered Defense Against Crypto Scams and Fraud

Noti is a revolutionary AI-powered sniping tool that goes beyond connecting you with potentially lucrative opportunities in early-stage tokens. In addition to monitoring the blockchain 24/7 to discover and scoop up hot tokens for you, the tool protects your snipe trades against prevalent market risks on decentralized exchanges (DEXs) like rug pulls, front-run attacks, and other types of scams.

Besides providing standard security features, such as passwords, Noti’s architecture is built to detect and prevent various scams and fraud techniques through the following advanced functionalities:

Front Run Protection

A front-run attack happens when a malicious actor exploits classified knowledge of pending transactions in the mempool to gain an unfair advantage at the expense of other market participants.

To execute this attack, the bad guy, who can be a network miner or validator, monitors the blockchain and strategically prioritizes their own transaction by paying a higher gas fee. This move allows the front-runner to offload their holdings before the target transaction, potentially resulting in significant losses for the victim and the disruption of the intended functionality of the smart contract.

This transaction’s function, which intends to convert BNB for SSToken, lacks proper slippage checks, making it susceptible to a front-run attack. The victim may end up paying more for the SSToken or receiving much less than expected due to the manipulated transaction queue if the attacker manages to slip in their high gas fee transaction and it’s processed first. In the case of a sophisticated attack, the attacker can artificially inflate or deflate the prices of involved tokens at the victim’s expense.

The Noti sniping tool can shield you from this exploit and other types of front-run attacks (sandwich, displacement, or back-running) by bypassing the mempool to ensure that your snipe trades are visible only after they’re executed on the blockchain. In other words, Noti’s snipe trade would be considered one of the front-run transactions as well, putting you ahead of the malicious actors while providing a competitive edge.

Rug Pull Protection

Rug pulls are arguably the most prevalent types of scams in the crypto industry, with Solidus Labs estimating over 300,000 tokens used to swindle two million investors of their hard-earned money. For context, this number is higher than that of investors harmed by the implosions of Sam Bankman-Fried exchange FTX, Voyager, and Celsius combined.

As the name suggests, this scam happens when a dubious developer creates a cryptocurrency, aggressively promotes it to lure buyers, and then “pulls the rug” from under investors by dumping their holdings abruptly. This leaves investors with tokens worth nearly nothing, leading to significant losses, depending on how much was invested.

Before executing the scam, malicious actors may hype up investor interest in various ways to make the token seem legitimate. This may include creating misleading marketing websites, announcing fake partnerships with celebrities, asserting untrue claims about the token, or engaging in wash trading to pump the coin’s price or trading volume.

For context, the Atlanta film producer Ryan Felton executed an exit scam on FLiK in 2018 after falsely representing to investors that the token was finalizing deals with major studios and televisions. The creator also alleged the U.S. military had agreed to distribute the token’s streaming platform to service members, asserting an untrue claim of utility. Shortly after the ICO, Felton dumped over 40 million FLiK coins, causing the token’s value to plummet before he was prosecuted two years later for engineering $2.5 million crypto-based investment scams.

Whether investors were made whole in Felton’s case remains unknown, underscoring why it’s important to avoid getting scammed through a rug pull in the first place, rather than waiting for law enforcement to swoop in. That’s what Noti does — it shields you from potential rug pulls before you become a victim.

Noti’s Rug Pull Defense

Noti actively monitors the tokens you have bought to flag a pending action to withdraw a liquidity pool and send a real-time notification or act on your behalf. Once detected, the tool’s system automatically executes an exit transaction to remove your liquidity from the compromised mempool, disposing of the tokens before they are rendered worthless.

For swift action, Noti beats malicious actors at their game by setting high gas limits and fees for the transaction to prioritize it in the blockchain queue before liquidity is withdrawn.

Scam Protection

Another layer of defense that Noti offers against crypto fraud is proactive scam protection. This includes shielding you from tokens that are outright decentralized finance (DeFi) scams from the word start. The DeFi scam exploit involves modifying a token’s smart contract to make it nigh impossible for investors to sell the coins after buying in, especially in the case of a honeypot.

This scam can also manifest in various other ways, including

• Hidden mints: allows unscrupulous developers to generate unlimited new tokens.
• Hidden fee modifiers: allows token creators to set unreasonably high gas fees, sometimes even 100%.
• Hidden transfers: allows the developer to send tokens from users to themselves.
• Fake ownership renunciations: lets the developer arbitrarily call sensitive functions.
• Hidden max transaction amount modifiers: allows malicious actors to set the maximum transfer value to as low as zero.

Let’s explore the “Dictionary” DeFi scammer to understand how this scam works on unsuspecting investors. This scammer has deployed over 9,000 scam tokens across Ethereum, BNB Chain, and Polygon, making them one of the most dreaded fraudsters in the crypto industry. One of the scams he recently executed involved a dubious token named SafeUkraineInu.

From the codes, you can tell that the scammer has leveraged unconventional variable names in ERC-20 token smart contracts, including shirt, uncle, ice, and herd. This source code for each token has been edited to enable two scams at once: a hidden mint and a honey pot. The hidden mint allows the scammer to mint additional tokens arbitrarily while the honeypot prevents holders from reselling the tokens.

While this might be visible to someone with technical Web3 knowledge from the word go, newbies might easily fall for the scam. That’s where Noti steps in. You don’t have to worry about auditing codes to detect factors that may indicate a fraudulent token as the tool does the heavy lifting for you by automatically simulating selling actions to assess suspicious behavior before executing a snipe trade. This provides an additional layer of protection, helping you make prudent investment decisions before it’s too late.

Additional Tips on How to Protect Yourself from Crypto Scams

The rapid innovation of the DeFi landscape, coupled with its dynamic regulatory structure and and the industry’s complexity has made cryptos a hotbed for cybercriminal activity. In addition to leveraging Noti’s built-in scam protection features, it will help if you also employ other measures to beat scammers. For instance, you could:

• Conduct thorough due diligence before investing.
• Secure personal data through strong passwords, encryptions, and private keys.
• Stay updated on the crypto industry’s evolving landscape.
• Trust your instincts.
• Seek professional help when impacted by a scam and report it to appropriate authorities.

The Bottom Line

Getting scammed in crypto is easier than you might think. If an unscrupulous developer in Asia doesn’t get you, your favorite celebrity in the U.S. or any other part of the world may pull a cool exit scam on you — by the time you know it’s too late. That said, use automated trading tools that give you the upper hand in the market while protecting you from the bad guys. In this category, Noti has emerged as a top contender, thanks to its revolutionary features that provide ongoing protection against scams, rug pulls, and front-run attacks.

FBI Flags $5.6B Crypto Scam Scourge: How Noti Sniping Tool Protects You from Fraud was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.