TON Scam Projects

TON Scam Projects (TSP) — a type of projects in The Open Network that have failed to fulfill their obligations to their audience: users, investors, partners, key opinion leaders (Influencers). The result of fraudulent activities are: financial losses of users and investors, reputational losses of partners and Influencers. As a result, the activities of fraudulent projects have a negative impact both on all participants of TON projects and on the entire TON Ecosystem as a whole.

Main objectives of the Scam project:

Make a Positive First Impression
Gain the trust of the audience and influencers (KOL)
Implement a fraudulent scheme, depriving project participants of invested funds (Rug pull)
Effectively cover up all possible traces

The main reason for the massive spread of Scam projects is the lack of widespread practice of punishing fraud in the field of cryptocurrencies.

Classification TSP

Scam projects in TON network can be divided into several categories:

Main category of fraudulent schemes

According to the method of application:

Additional categories of fraudulent schemes

In terms of the project's running time:

Slowrug (slow withdrawal of money from the project — author's note)
Fastrug (one-step withdrawal of money from the project — author's note)

By frequency of fraudulent activities in one project:

One-time scam (after deception of the main audience scam-project is closed, all contacts of the involved admins and the project founder are deleted— author's note)
Multi-time scam (after the first deception of the main audience, the scam project continues to commit fraudulent actions — author's note)

These categories indicate the use of popular trends in TON application development, psychological manipulation, and methods to deceive users of Scam projects.

TON Stake scam

Stake scam — a project that provides financial services in the form of token investments in the TON network at an annual interest rate significantly higher than that for standard Stake services (Tonstakers); after capital accumulation, money is withdrawn from the project according to three scripts:

Promise of inflated annual interest rates in fixed staking pool (minimum 2 weeks) with further rate drop, withdrawal of money from the project.

MTK is a token. After the release, the creators opened stacking promising 264% annualized returns. After deceiving users, the exchange rate collapsed. At the same time, they held a pre-sale and issued tokens to participants after the collapse of the exchange rate, when all participants were at a disadvantage.

Fake stake contracts. Scammers create fake stake services, as a result of which you can lose all funds from the connected wallet.

Example of a fake stake service (RStaking.com)

Hacking a stake platform. This type of scam applies to a stake-platform only if the platform itself has withdrawn depositors' funds under the cover of hackers' actions. Since it is often impossible to prove the involvement of the platform in such a scam, to minimize the consequences, it is advisable not to use platforms that have ever been hacked by hackers.

The latest known hack of the stake service

TON Presale scam

Presale scam — a project that organizes fundraising for the issue of its own token or NFT, with the withdrawal of investors' funds to their own wallets. After capital accumulation at the expense of investors, several scripts are possible:

A simulation of a successful token launch, where the project gives a few X's at launch, then the creators/market maker hits the token rate, and issues tokens to pre-sellers. As a result, early investors are at a loss. Further, it is possible to withdraw liquidity from the project and close it down (Fastrug). Either the creators announce further plans, provoking people to buy their own token, gradually selling their part of tokens, then withdraw liquidity and close down the project (Slowrug).

GATO is a classic example of a scam project that simulated building plans for the future development and then withdrew liquidity.

Withdrawal of investors' money and project closure. For additional deception of its audience it is possible to launch «Honeypot» token, which can be purchased on DEX-exchanges (DeDust, STON.fi), but it is impossible to sell — author's note)

This project, after a launchpool and advertising campaign, withdrew the money of its users to the exchanges.

Creation of a token with a fixed commission, imitation of a successful launch of the token, as a result of which the project gives a few X's at the start, then the commission is increased by the creators to 99%, and the funds received from such commission are withdrawn to exchanges. The project is closed.

Clown Ton rebranded to Clown Sol, giving away all the presale instead of the promised vesting, no terms and conditions were met on the part of the team. Money was taken out on exchanges, commission was twisted to 99% with a 1% drop in commission per day. They accused TON Foundation of lack of support. They promised to make a bridge to Solana - but they didn't.

Presale with vesting. From the beginning of token issuance, a fictitious rate hike is created, then 5 — 50% of the presale tokens are issued. The next payout occurs after a time set by the project. During this period, the creators sell their share of tokens, the rate falls to values at which there is no possibility of returning the invested funds. MTK, Clown TON projects with similar mechanics of deceiving investors have been mentioned earlier.

TON «Play-to-Earn» scam

P2E scam — a project positioning itself as an online game on the TON blockchain with the possibility of earning money. Deceiving users is possible under two scripts:

Presale on game attribute. This type of scam is a fundraiser for a P2E project in exchange for a game attribute that will give an advantage in the game. For the normal functioning of the project and the possibility of returning the investments of the presale participants, the project needs to have game mechanics that allow it to reach payback for early investors within a few months. Also, all promises made by the project must be fulfilled. If that project doesn't deliver on promises and the payback grows from a few months to a few years - Slowrug happens. Also, the project can withdraw the presale money immediately and close down (Fastrug).

TON OIL made a limited presale for an oil station in an upcoming game. Then made a «wheel of luck” with the option of knocking out in-game items. Next, the game was launched and the rate of in-game items collapsed. Investors were unable to withdraw even a fraction of the money they had invested.

A Ponzi scheme project. Such a project entices investors with high annual interest rates, a very short payback period, and promises of long-term profits. Such projects exist on the basis of a Ponzi scheme — payments to early investors are made at the expense of later investors. Pyramid life time — from a few days to a few months, depends on the construction of the economy inside the game, the promised annual interest rate of profit and the goal-setting of the creators (determining the amount that the creators plan to withdraw). When the project is closed, all funds available at the moment will be withdrawn.

FARM WORLD made a limited sale of packs in the upcoming game. Then these packs allowed early users to get into a small profit, so investors started to buy instruments at 20-50 TON. After a few weeks the money was withdrawn. The admin justified this action by «hacking». As a result, the investors of the second wave, attracted by positive reviews about the project and referrers, lost their funds.

TON Hype scam

Hype scam — a project that imitates a well-known project on TON, attracting newcomers with free bonuses and/or dropping tokens of a well-known project. Once the audience is recruited, several variants of fraudulent actions are possible:

Honeypot is a fake token that imitates the token of a well-known project on TON. The main characteristic of such a token is the feature of smart contracts, in which there is no possibility to sell the token to all participants of the trade, except its creators. The idea of fraud is that the volumes of this token are inflated artificially, ads are launched in chats and publishers of Telegram, people start buying the token, and the rate grows. However, it is no longer possible to sell this token. Then, as soon as the necessary amount is collected, the project liquidity is withdrawn.

Honeypot token that imitates the famous Catizen project

A Drainer is a smart contract designed to withdraw all funds from an investor's wallet. Scammers lure investors with a free NFT mint or token drop, often using the name of a well-known TON project to advertise it. The investor, after signing a contract to receive the NFT/token, loses all his funds.

A drainer that imitates the famous UniSwap site.

Fake presale — a presale that is organized on the name of a well-known TON project or a well-known influencer, which attracts funds from investors, after which the project suspends its activity.

The ANON project used the name of Alexander Plotvinov (CEO of NOTCOIN) to launch NFT collections ostensibly on his behalf and earn commissions on NFT sales. Next, the creators launched a presale with a hint of Plotvinov's involvement, after which they promised an ANON SPACE game. But finally nothing was ever completed.

Scam NFT — fake NFT that contains a link to a dangerous site. Appearance imitates involvement with a well-known TON project, guaranteeing the delivery of token drops allegedly from this project. As a result of clicking on the harmful link, connecting the wallet and signing a contract to receive the drop, the user has lost all his funds. Currently, Scam NFTs have been noticed with a new feature — when sending such NFTs to a burn address, an additional commission is charged, while the NFT remains on the wallet

Example of Scam NFTs. The number of these NFTs depends on the activity of the crypto-wallet in TON network. The more actively the user uses the wallet, the more often Scam NFTs fall.

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