Scam projects are issuing tokens on Solana only to burn them as soon as users buy them.
With scammers wreaking havoc across the cryptocurrency ecosystem of late, they have identified new ways to get users, especially on the Solana blockchain. Many users reported observing tokens disappear without any reason. They did not approve any transaction or click on malicious links.
As strange as that may sound, it is something that many token holders on Solana-related projects continue to report. And there is an explanation for it. Slorg, a member of Solana-based Jupiter protocol’s core working group, took to X to let the community know what was going on. “Scammers have found a way to burn tokens inside your Solana wallet,” they mentioned. “After the Moderation Staff looked into it, something stood out on the Solscan page: There was a burn transaction only 7 seconds after the user had received the tokens.”
They further explained this occurred due to the ‘Permanent Delegate’ extension being active on the tokens. This is a legitimate feature Solana introduced in 2022 to ensure projects could retrieve tokens transferred by them or their users by mistake. Moreover, it allows projects to retrieve tokens from wallets associated with illicit activities to comply with regulations. However, it could be misused, like it has recently.
Scammers Have Their Reasons Despite Burning Tokens Seeming Illogical
Still, burning the tokens does not net anything directly for scam projects. The tokens are gone forever, leaving token issuers who mint the tokens from gaining nothing. One theory floating around the crypto community is that some scammers want to watch the world burn. As token issuance on Solana has become effortless through applications like Pump.fun, they create projects to sell tokens and burn them immediately to prank the buyers. Another theory indicated that scammers could be doing this to reduce the supply suddenly and drive up token prices. That way they profit more when they ditch their projects entirely to pull the rug on token holders.
