Over 500 scam tokens have surfaced on Coinbase's recently launched blockchain platform, Base. These malicious endeavors led to a shocking loss of $2 million, as reported by Solidus Labs, a prominent crypto market integrity firm.

Scammers have taken advantage of the vulnerability of blockchain networks, which allow anyone to use them to target unsuspecting individuals. Developers took advantage of this vulnerability between mid-July and Base's public debut in August and created scam tokens.

Approximately 300 of these tokens allowed creators to mint an unlimited number of coins without the knowledge of Base users, significantly impacting the value of these tokens. Additionally, another 60 coins blocked buyers from reselling them on exchanges, further facilitating the scams.

The trading volume generated by these scam tokens reached a staggering $3.7 million on Base-based decentralized exchanges. However, it's not just scam tokens that have plagued the platform; other cryptocurrencies have also been deceptively touted and traded on Base.

Although detecting scam tokens in decentralized finance is relatively easier than in traditional finance, the buzz surrounding Base has attracted scammers. These scam token creators rely on hype, promises, and manipulating prices and trading volume to deceive users.

This issue is not exclusive to Base, as token scams are prevalent on all public blockchains. In 2022 alone, Chainalysis, a blockchain data platform, found that 24% of all new tokens launched exhibited characteristics of pump-and-dump schemes.

Coinbase introduced Base, intending to foster a community of developers who would build decentralized apps for Coinbase users, enhancing the exchange's utility and engagement. Base, built on top of Ethereum as one of the Layer 2 networks, simplifies the creation of decentralized apps that connect to Coinbase's products, users, and tools.

Illicit crypto transactions hit a second consecutive all-time high, reaching $20.6 billion in 2022.

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