Users are reporting that tokens they’ve bought are disappearing from their Solana wallets almost immediately after purchase. This new scam tactic involves fraudsters using a feature within Solana’s token extension to burn tokens directly from users’ wallets.
According to Slorg, a member of the Core Working Group at Solana-based Jupiter, scammers have discovered a way to exploit Solana’s token infrastructure to erase tokens shortly after they are acquired.
In a September 3 post on X, Slorg described a scenario where users see a successful transaction confirming token receipt, only to find that their wallet balances remain unchanged. “Imagine swapping for a token, the transaction history confirms receipt, but nothing shows up in your wallet,” Slorg explained.
Exploiting the Permanent Delegate Feature
The scam centers around tokens utilizing a “Permanent Delegate” extension. One such case involved a token named “RED.” This feature, part of Solana’s Token 2022 standard, allows scammers to burn all tokens associated with a transaction within seconds.
PeckShield, a blockchain security firm, detailed that the Permanent Delegate extension grants “unrestricted delegate privileges over all Token Accounts for that mint,” allowing for burning or transferring tokens without limitations. While it is designed for legitimate uses like handling mistaken transfers or compliance, it also presents significant risks of abuse.
Motivations Behind the Token Burning
Slorg outlined several reasons why scammers might use this method. One motivation is to create chaos and confusion. “Sometimes scammers just want to cause destruction and chaos,” Slorg noted. Another reason is to manipulate token supply. By burning tokens, scammers can disrupt the market, potentially driving up the token’s price or affecting its perceived supply.
“There are instances where scammers target initial token supplies to generate quick, albeit small, profits,” Slorg added. Blockchain security experts from Beosin and PeckShield support this view, suggesting that manipulating token supply could impact tokenomics or deceive users into believing the circulating supply remains stable.
Protecting Yourself from Scams
Jupiter and RugCheck have developed indicators to detect when the Permanent Delegate extension is active. However, Slorg emphasizes the importance of vigilance when dealing with tokens. “Always practice due diligence, read all transaction details carefully, and be aware of new token functionalities to avoid costly mistakes.”
Recent reports indicate that similar scams are affecting other users, underscoring the need for caution and thorough research when engaging in token transactions.
