Scammers Exploit Solana Token Extension To Burn Users' Crypto

According to Cointelegraph, scammers have discovered a new method to defraud Solana users by burning tokens directly from their wallets. Slorg, a member of Solana-based Jupiter’s Core Working Group, revealed that scammers are utilizing an in-built Solana token extension to covertly delete their targets' crypto holdings. In a post on X dated September 3, Slorg explained how users might swap for a token, see the transaction confirmed in their wallet history, but find no tokens present upon inspection. This scenario recently affected a Jupiter Community Member who swapped for a token named 'RED,' which has a 'Permanent Delegate' extension. This extension allowed scammers to burn all tokens in the transaction just seven seconds after it was completed. PeckShield explained that the Permanent Delegate is a feature in Solana's Token 2022 standard, granting unrestricted delegate privileges over all Token Accounts for that mint, enabling the burning or transfer of tokens without limitation. While intended for legitimate use cases such as retrieving mistakenly transferred tokens or sanction compliance, Solana acknowledges it can be misused. Slorg suggested that scammers might burn tokens to cause chaos or reduce the token's float, preventing price decreases. He noted that scammers often snipe most of the initial supply and can profit even from small amounts. Blockchain security service providers Beosin and PeckShield shared similar theories, speculating that scammers aim to manipulate the cryptocurrency’s tokenomics by affecting the circulating supply. Beosin added that scammers might trick users into believing the token's circulation remains unchanged by destroying users' tokens, potentially raising the token price and profiting from related DeFi protocols. Slorg emphasized the importance of due diligence when dealing with any token, advising users to follow a consistent routine and thoroughly read all text during swaps to avoid falling victim to such scams. He also mentioned that Jupiter and RugCheck have developed indicators to alert users when the Permanent Delegate extension is activated. Other users have reported similar scams recently, highlighting the ongoing threat. Practicing caution and staying informed about new token capabilities is crucial to safeguarding one's assets.