Honeypot Scams Lock $6.9 Million in Crypto Hardware Trap

Honeypot scams are a type of smart contract trap that lure investors with fake liquidity, price movement, and hype, but the contracts are rigged to prevent exits, locking funds permanently. These scams are evolving rapidly in the decentralized finance (DeFi) world, targeting both new and experienced investors. The scams involve carefully engineered smart contracts, typically on Ethereum or BNB Smart Chain, that exploit the flexibility of Solidity to embed malicious logic into the token’s code. Common tactics include overriding transfer or sell functions, excessive sell taxes, hidden blacklists, and fake liquidity pools. Even tech-savvy users can fall for these scams, as tools like Etherscan or BscScan may show the contract as verified, and price charts can display realistic activity. However, unless the smart contract code is reviewed line by line or automated auditing tools are used, the hidden trap can go unnoticed.

Honeypot scams follow a three-stage process. First, the attacker deploys a malicious smart contract on a blockchain, making it look like a normal token with liquidity, price charts, and sometimes even fake community engagement. Second, once investors buy the token, the hidden restrictions in the contract kick in, disabling the sell or transfer functions for everyone except the scammer’s wallet. From the victim’s side, it looks like they made a successful purchase, but when they try to sell, the transaction silently fails. Third, once enough people have invested, the attacker dumps the tokens or withdraws the liquidity pool, cashing out the victims’ funds. The entire scheme is coded into the contract from the start and doesn’t depend on market trends or team behavior; it’s a technical trap built into the blockchain.

There are several types of honeypot scams, including smart contract honeypots, high sell tax honeypots, fake or pulled liquidity honeypots, hardware wallet honeypots, and honeypot-as-a-service (HaaS). Smart contract honeypots let you buy tokens but secretly block selling through the contract code. High sell tax honeypots come with a massive fee, often up to 100%, when you try to cash out. Fake or pulled liquidity honeypots show real trading activity, but the liquidity pool is either fake or pulled suddenly after investors buy in. Hardware wallet honeypots involve physical cold wallets sold at a discount, usually through shady websites or social media platforms, and come preloaded with private keys already known to the scammer. HaaS scammers use prebuilt honeypot kits sold on Telegram and dark web forums, allowing non-technical criminals to launch scams with just a few clicks.

Honeypot scams are different from rug pulls, which involve the scammer draining the liquidity pool, leaving holders unable to trade at any real value. The attack happens suddenly, usually after a period of hype and user investment. In contrast, honeypot scams are present from the very beginning, and the contract is designed to deceive from launch. Honeypot scams are often difficult to detect by just reading the code, as scammers use obfuscation or misleading naming to hide red flags. Victims see price movement and think the token is gaining value, but when they try to exit, sell transactions fail or are limited to nearly zero.

Modern-day crypto honeypot traps go beyond onchain scams and target hardware. A recent case exposed how a fake cold wallet sold via Douyin became a modern-day honeypot. The wallet looked factory-sealed but came preloaded with a private key secretly controlled by scammers. Once the user transferred funds, over $6.9 million was stolen within hours. These “honey traps” trick users with discounted prices and fake legitimacy. Always buy wallets from trusted sources, initialize them yourself, and avoid third-party resellers. Today’s crypto threats go beyond code; they target convenience, trust, and human behavior.

To spot a honeypot crypto scam, test small sells before investing big, use smart contract scanners, check for real sell activity, watch out for 100% sell taxes, don’t rely on “verified” contracts, and be cautious of sudden hype. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.