Counterfeit Ethereum Solution Discovered
In a troubling development for cryptocurrency enthusiasts, a deceptive group has launched a counterfeit Layer 2 Ethereum solution impersonating the legitimate Giwa project, which is financially supported by Upbit. This saga began when DYORSWAP, a multichain decentralized exchange, identified the fraudulent chain, designated with the Chain ID 9134 and initially associated with Giwa.
Impact of the Scam
This fake chain managed to trick over 1,335 users, leading to the theft of approximately 766.25 ETH—equivalent to over $2 million at the time—before the funds were siphoned off.
Reports indicate this is the first occurrence of such a sophisticated scam, marking a concerning trend in the crypto space. Unlike previous scams that merely misrepresented an ETH address, this operation employed advanced infrastructure typical of a legitimate Layer 2 chain, including an OP stack framework, a bridge, and a transaction batching system, thus raising the stakes of deception.
Warnings and Clarifications
Despite the apparent activity on the fraudulently deployed chain—which saw users engaging in transactions and token launches—DYORSWAP promptly warned the public:
“Until further notice, DO NOT use any unofficial GIWA Mainnet RPC, bridge, or contract, and DO NOT send funds to any related addresses.”
Simultaneously, the authentic Giwa project stepped forward to clarify that it had not yet launched its mainnet, stating emphatically on social media that
“any posts claiming that they have GIWA mainnet RPC information are NOT TRUE.”
Dismissing any direct accountability for the theft, Giwa reassured users that the compromised funds originated from the fake chain. In response to the incident, DYORSWAP initiated a compensation process, declaring that it had already distributed over 200 ETH from its reserves to help affected individuals. The exchange also committed to further investigations aimed at tracking the perpetrators responsible for the malicious chain’s deployment.
User Sentiment and Broader Implications
User sentiment, however, has leaned toward criticism of DYORSWAP, as many believe that had the exchange not participated in the proliferation of the counterfeit chain, the scheme might have gone unnoticed. Some characterized the incident as a social engineering con that preyed upon users unaware of the dangers.
This incident is reminiscent of other recent security breaches impacting both decentralized and centralized platforms, perpetuating a sense of unease among crypto investors. Notably, Bitget suffered a staggering $350 million loss following a breach that affected seven different blockchains, highlighting the ongoing vulnerabilities within the crypto ecosystem and the urgent need for vigilance among traders.
