Ethereum (ETH) Network Still Overloaded, Token Scam Detected
An airdrop that took over in the past months, More Gold Token, was identified as a potential scam.
The Ethereum (ETH) network continues to log in a heavy transaction load, with the Tether (USDT) smart contract still burning up most of the gas. But another smart contract raised doubts. This time, it is the More Gold Token, an airdrop that periodically took over the network in the past two months.
The More Gold Coin, or MGC, is an unknown and unlisted digital asset that is tied to a crypto investment project. The project’s promises are raising red flags with the potential for high returns in a short timespan.
The team of EthGasStation analyzed the project and came up with the conclusion the tokens are a potential scam.
“We’re not in a position to go so far as to declare MGC Token to be a scam (for one, we haven’t invested in the project and have no intention of ever doing so). However, in our opinion, MGC Token does seem to exhibit some of the warning signs listed in the SEC’s common characteristics found in Ponzi schemes,” explained the team.
The project claims to use algorithmic high-frequency trading to achieve unusually high returns. However, the same model of automated trading was the promise of BitConnect, one of the biggest crypto-based Ponzi schemes. In reality, BitConnect used the funds of new buyers to pay the older ones, along with a lucky break during the biggest Bitcoin (BTC) bull market in history.
The MGC airdrop was, thus, quite mysterious. There was no requirement to buy the coins, and instead the project was spending significant sums on gas fees to distribute the asset back in June.
Airdrops in general may not be a scam. But in the case of MGT, the airdrop is a form of drawing in wallet owners. To activate the assets, users have been asked for private keys to their wallets - a direct invitation to have any assets in that wallet stolen:
MGT seems to be actively targeting Asian crypto owners, similar to the recently discovered Plus Token, which was hardly known outside Chinese and Korean social media.