Beware of fake token scams

We’re aware of a scam involving fake crypto tokens, often mimicking Tether (USDT), being sent to customers. Even though the payment is confirmed on the blockchain, the funds are not received in your Luno wallet.

How it works

It’s not difficult for anyone to create a new cryptocurrency. Scammers can create their own ERC-20 tokens, and they can even name them “Tether” or “USDT”, but these tokens are not the real deal. They don’t originate from Tether and they aren’t pegged to the US dollar. In fact, they aren’t worth anything.

Using their counterfeit supply of “USDT” tokens, scammers can trick you into thinking you’ve received real USDT. The transaction will appear to be legitimate on the surface: if you visit a blockchain explorer and search the provided transaction ID, you’ll see that the send did indeed take place.

The blockchain explorer will show that X amount of “USDT” has been sent and confirmed to your Luno wallet address. However, the USDT does not reflect in your Luno app, even after it was supposedly confirmed on the blockchain. This is because no real USDT was sent to your Luno wallet, just a worthless token disguised as “USDT.”

How to spot fake USDT

  1. Visit etherscan.io and in the search bar, enter the transaction ID (also known as a TxID or transaction hash) for the transaction you want to query

  2. You’ll see information about the transaction. In the Transaction Action row, select the token’s name to see more information about it.

    a screenshot from Etherscan with the token's name highlighted
  3. Examine the token’s information page and use the table below to determine if it’s real or fake:

Real token

Fake token

Has the correct icon and there’s a verified checkmark next to its name.

Tether USDT token with correct green 'T' logo and verified checkmark

Might not have the correct icon, and no verified checkmark next to its name.

Fake grey USDT icon without verified checkmark

Has millions of holders and total transfers.

Frame 481915.png

Has very few holders and total transfers.

Frame 481916.png

Its price is what you’d expect, and it has high-value market caps.

Frame 481917.png

Its price and market caps are non-existent, zero, or otherwise extremely low.

Frame 481918.png

The token contract address is correct. For example, USDT’s token contract is at this address: 0xdAC17F958D2ee523a2206206994597C13D831ec7.

6.png

The token contract address is incorrect. It doesn’t match the address stated by official sources, such as the real token issuer’s documentation.

18.png

You’ll find links to the real token issuer’s official website, social media, whitepaper, etc.

Frame 481921.png

There are no links to official websites, social media, or the whitepaper associated with the token issuer.

Frame 481922.png

 

USDT is not the only token that scammers create fake clones of. You can follow a similar approach as described above to take a closer look at the token being sent to you.

How to avoid fake token scams

  • Be wary of unsolicited offers, for example someone reaching out to sell their crypto to you directly

  • Consider buying crypto on a reputable exchange rather than directly from someone you’ve met online

  • Understand that a transaction confirmed on the blockchain does not necessarily mean that real value has been transferred. Always check the transaction’s value (not how much has been transferred, but what value it’s actually worth), as well as the token’s price

Tip

If you suspect that you’re being scammed or you’ve lost money in a scam, read this article to find out what you should do or follow this link to report it to Luno. For further reading on this topic, see Ethereum’s guide on how to identify scam tokens.

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