Venezuela, Fake USDT Scams Rampant...Balance $0 but Payment Completed

▲ Venezuela, Tether (USDT)/ChatGPT generated image

A new type of fraud, where replica fake Tether (USDT) tokens with no value are disguised as legitimate payment methods to steal goods from stores, is spreading across Venezuela.

According to Bitcoin.com on September 20 (local time), local tech expert Juan Kassabji reported a series of payment frauds using fake USDT at store checkouts recently. The fraudsters induced store owners to receive payments into their self-custody external personal wallets, then sent fake tokens that mimicked official smart contracts. While these replicated fake tokens appear as 'USDT' on the wallet screen, they differ from Tether's official smart contract address and have an actual asset value of $0.

Merchants, only confirming the "transfer completed" notification on their wallet screens, handed over actual goods to the fraudsters and suffered losses. Kassabji confirmed a real case where a local merchant received fake USDT tokens and was defrauded of goods worth $5,500. While fraudulent activities exploiting fake tokens have occasionally been reported in peer-to-peer (P2P) transactions in the past, their use as a means to defraud physical goods in general offline retail stores is considered highly unusual.

Some cryptocurrency wallets offer security features that detect fake tokens and display risk warnings, but this is not universally applied across all wallet apps. Kassabji recommended using centralized platforms like Binance, which mediate most peer-to-peer transactions in Venezuela. This is because verified exchange platforms like Binance only process valid USDT tokens issued under official smart contracts into account balances.

Retail merchants who accept stablecoin payments using personal wallets are urged to exercise extreme caution. Kassabji explained, "Do not just look at the token name displayed in the wallet immediately after payment; you must always check the total balance converted to dollars." He added, "In the case of fake tokens, even if the payment quantity increases, the total balance will still show $0." He also emphasized that it is essential to compare the contract address of the received token to ensure it perfectly matches Tether's official issuing address.

Fraudulent crimes targeting the vulnerabilities of the Venezuelan market, where stablecoin payments are widely accepted to avoid inflation, are rampant. Establishing asset verification systems in offline retail settings and implementing payment security measures such as checking official contract addresses have become urgent tasks.

[Key Article Summary]

-Fraud has occurred in Venezuelan retail stores where replica fake USDT tokens with $0 value are disguised as legitimate coins to steal goods.

-Physical payment losses have been confirmed, including one merchant who received fake tokens as payment and was defrauded of goods worth $5,500.

-Experts advise checking the dollar-converted balance after payment, comparing the official Tether contract address, and utilizing Binance.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*