Examples#
This gallery walks through blockchainkit.fraud, one experiment per
breakthrough on the fraud history page:
Ponzi schemes from Ponzi’s own to Ethereum’s and BitConnect; Benford’s law;
proofs of reserves, liabilities and solvency, Mt. Gox and FTX; scam
contracts whose verified source deceives, from honeypots to the Squid Game
token, and ICO exit scams; the Willy bot, pump-and-dumps and wash trading;
and approval phishing and address poisoning.
Each script is self-contained and runs with
python examples/fraud/<section>/<script>.py.
Fabricated figures#
How the leading digits of honest numbers betray invented ones.
Benford’s law: detecting fabricated figures (1938)
Market manipulation#
Moving prices with unbacked money, coordinated crowds, and trades with oneself.
Gandal et al.: price manipulation in the Bitcoin ecosystem, the Willy bot (2018)
Xu and Livshits: the anatomy of a cryptocurrency pump-and-dump (2019)
Von Wachter et al.: wash trading in NFT markets (2022)
Phishing#
Taking funds without stealing keys: allowances and look-alike addresses.
Approval (“ice”) phishing on ERC-20 allowances (2022)
Address poisoning with look-alike addresses (2022-2023)
Scam contracts#
Contracts whose source deceives the reader who checks it, and token sales that vanish.
Verified source code, and why a verified source can still deceive (2016)
Torres et al.: honeypot contracts that trap would-be thieves (2019)
Torres et al.: the Solidity quirks honeypots exploit (2019)
Rug pulls and hidden-mint tokens: the Squid Game token (2021)
Ponzi schemes#
Paying old investors with new money, on paper, in contracts, and on lending platforms.
Ponzi’s scheme: paying old investors with new money (1920)
Bartoletti et al.: dissecting Ponzi schemes on Ethereum (2017)
Custodians and solvency#
Exchanges that hold their customers’ coins, how they fail, and how they can prove they have not.
Maxwell’s Merkle-sum-tree proof of reserves (2013)
The Mt. Gox collapse and the malleability excuse (2014)
Provisions: privacy-preserving proofs of solvency (2015)
FTX, commingled customer funds, and proof of liabilities (2022)