Peckshield Inc has identified more than 50 potential scam tokens on the Binance Smart Chain.

The firm analyzed dozens of smart contracts for early-stage projects and found malicious functions that allow team leaders to blacklist accounts and prevent users from selling their tokens.

Rug pulls are becoming common place in the crypto industry.

PeckShield analysed dozens of smart contracts for early-stage projects and found malicious functions that allow team leaders, who operate incognito, to mint an unlimited number of tokens, blacklist accounts, and prevent users from selling their assets.

On this account, the firm warned of the threat of a potential “rug-pull” by project developers, A “rug pull” happens when developers in cryptosphere make off with investor funds, abandoning a project.

PeckShield noted that the smart contracts for the tokens in question have been developed with clear malicious intent – allowing investors to buy the tokens, but unable to sell them, as the asset price appreciates in value.

This strategy, often referred to as a “honeypot”, is popular with cyber-criminals, who prey on retail FOMO (fear of missing out). As the token price reaches a level considered by the project leaders as good enough, they exit scam, leaving investors holding worthless ‘bags’.

A classic example of the “honeypot” is SQUID, a token created after the beloved Netflix show of the same name, Squid Games. The token soared more than 28,000% within days before plunging to zero after project founders pulled the rug, stealing $12 million.