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How Monero Gold (XMRG) Pulled A Few Million Dollars Scam on CoinExchange - LuvCrypto

How Monero Gold (XMRG) Pulled A Few Million Dollars Scam on CoinExchange

With 20,000 transaction speed per second, Monero Gold (XMRG) was considered a secure, private, and untraceable cryptocurrency. Little did we know it was also considered a scam that many took part in.

In fact, the devs of Monero Gold took advantage of the Ethereum bug and created an infinite supply of tokens. They dumped these new tokens for bitcoins forcing the market to crash. Over 4 million dollars were lost in this scam.

Today, each Monero Gold token has little to no value.

monero-gold-price.png

It is an unfortunate scheme that no one saw it coming. And those who saw it were ignored because of the way Monero Gold positioned itself.

Before The Scam, There Was A Plan

The Monero Gold devs started with the Bitcointalk forum. After annoucing the token, they began airdropping it to everyone. In fact, over five threads were created to offer these tokens for free to the Bitcointalk users.

Parallely, free tokens were offered on Twitter. In fact, Twitter was used for a number of reasons. It started with free airdrops and then a series of hype-induced announcements.

For example, one of the biggest hype was related to Monero Gold applying for Binance:

monero-gold-binance-exchange.png

Then there was also a promise of creating a mobile wallet very soon. Before this, @MoneroGoldToken also announced an upcoming partnership with a cryptocurrency debit card provider.

Even their website seemed legit, with a team of 8 working on developing and marketing this token!

 monero-gold-team.png

All these factors installed faith in the project. Perhaps that is why a handful of users shilled Monero Gold on Twitter, Reddit, and 4Chan.

And Then There Was This Scam!

First, the coin was listed on CoinExchange.io – it was the only exchange to buy and sell these Monero Golds.

Then, after getting listed here, the devs took advantage of the Ethereum’s integer underflow bug. This bug allows you to manipulate the total circulating supply. As 66shitcoin points out:


“the owner of the contract executed an integer underflow and created a couple trillion units of his own currency, and nobody saw it coming.”


Many more XMRG tokens were generated without anyone’s notice or permission. Unfortunately, by the time we saw it coming, the devs had already dumped their newly created tokens while taking the market down to a significant level.

What Next?

This scam highlights one of the major problem with the Ethereum’s programming language. Anyone can create tokens and manipulate its supply.  In fact, article posted by ETH Bytes explains how such new tokens can be minted:


“Developers should use a library called SafeMath, this allows for the handling of integer overflows in Solidity (Ethereum’s programming language). Monero Gold did not use this library, this allowed for negative integers to be passed through the burnSupply() function thus, returning a positive value and minting new tokens. Etherscan shows the token holders for XMRG, you can see the top wallet is currently holding 5,513,909,011,300,770,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000.0000% of the token supply.”


It is difficult to catch these scams before they make it to the market. Perhaps that is why they have been successful. Either way, CoinExchange.io acknowledged it and placed a buy order (so anyone who got scammed can sell these tokens and get bitcoins in return):


“Upon further investigation we regret to inform the community that it appears that the developers are responsible for this fraudulent activity.”

“We will place a buy wall of 26 BTC at 0.00000002 BTC until the market and XMRG are delisted at a later stage (to be announced).”

CoinExchange will be delisting Monero Gold very soon.

Monero Gold website no longer operates. Its homepage displaying the token details, along with the roadmap, whitepaper, and everything else has been wiped out… while leaving this behind:

monero-gold-website.png

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Sid
 

My name is Sid. As a full-time tech blogger, I discovered cryptocurrency in 2014. Been hooked since then.

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