Fake PayPal USD Tokens Pop up on Several Blockchains

A fake dollar. (Getty Images)

Users can transfer PYUSD between PayPal and supported external digital wallets, use the tokens to pay for goods and services or convert any of PayPal’s supported cryptocurrencies to and from PYUSD.

While the tokens are yet to come, some scammers are already trying to trap unsuspecting users. The modus operandi is to issue a token, name it “PYUSD,” add liquidity with ether or another token and offer it to users on a decentralized exchange.

This is possible as anyone can call a smart contract and issue tokens on Ethereum (or other blockchains) for a few cents, and the presence of decentralized exchanges means tokens can instantly be issued, supplied with liquidity and traded soon after.

Most of the supply of these tokens are likely purchased by their creators after issuance, giving the illusion of a trendy token while being a honeypot in reality. The hustle may yield a few thousand dollars in a few hours for such developers – making it a profitable, albeit wholly unethical, venture.

Some developers may, however, pull all liquidity from the fake tokens hours after issuance, causing prices to drop 100% and leaving speculators holding digital dust.

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