Solana users are facing a fresh wave of scams where fraudsters burn tokens right after they've been purchased.
Slorg from Jupiter Exchange highlighted this issue in a September 3 post on X, revealing that scammers are exploiting a token extension to erase purchased tokens from users' Solana wallets.
He explained, "Imagine you swap for a token, and the wallet history confirms that you received it. But then you look inside, and nothing shows up."
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Slorg detailed an incident involving a Jupiter community member who had swapped for a token named "RED." This token featured a "Permanent Delegate" extension, which allowed scammers to burn the user's tokens just seven seconds after the transaction was finalized.
The "Permanent Delegate" token extension can grant unrestricted control to designated entities, allowing them to burn or transfer tokens from any token account of that mint.
Although this feature is intended to serve legitimate purposes—such as correcting token transfers, managing revocable access tokens, or enforcing compliance—it can be weaponized by bad actors. Solana itself warns that while this extension has beneficial uses, it is a "double-edged sword" with the potential for abuse.
The scammers' motives for burning these tokens seem to vary. According to Slorg, some are simply looking to cause chaos. For others, it’s a strategy to manipulate token supply—by reducing the number of tokens available, scammers prevent users from selling, which keeps the price stable or inflates it artificially.
Slorg explained:
If someone can't sell, the price won't decrease. Many of the times scammers snipe most of the initial supply and the thing is they don't need more than $50 dollars in profit to make it worthwhile.
This method, while not highly efficient, can still be lucrative. Slorg recounted observing a scammer in November who launched numerous tokens and consistently earned $50 to $100 from each. Even though it does not seem like much, they were making thousands over the course of the week.
To counter this threat, platforms like Jupiter and RugCheck have started offering indicators that can alert users when this token-burning extension is activated.
However, Slorg emphasized that the best defense remains thoroughness. He urged users to "practice due diligence with any token," advising them to develop a routine for reviewing transactions and ensuring that all details are carefully read before completing a swap.
Thus, as scammers continue exploring and exploiting new tactics, it's crucial to stay cautious and informed.
In other news, in August, a crypto scammer was arrested in South Korea despite spending $16K on plastic surgery and disguises to avoid capture.
