Key Takeaways
- Scammers are advertising fake Ethereum trading bots online.
- YouTube channels are used to promote malicious smart contracts masquerading as MEV tools.
- One scam contract identified by Sentinel Labs drained over $900,000 from victims.
In the latest scam targeting crypto users, YouTube channels have been discovered advertising what appear to be arbitrage trading bots. But in reality, the videos direct users to interact with malicious smart contracts that drain their wallets.
Research by Sentinel Labs identified several examples of the scam, with one attacker’s address raking in over $900,000 in stolen crypto.
Recommended Secure Partners
Wallet Drainers Disguised as MEV Bots
The scam model described by Sentinel Labs centers on Ethereum trading bots known as MEV (maximum extractable value) bots.
The goal of legitimate MEV bots is to identify arbitrage opportunities and execute profitable trades, usually targeting highly liquid assets on decentralized exchanges like Uniswap and Curve.
While software developers like Flashbots offer a range of MEV tools, the most successful traders use custom bots and and strategies to gain an edge in a zero-sum environment.
Against this backdrop, an entire media ecosystem has emerged around MEV trading, but not all the content circulating offers legitimate advice.
Sentinel Labs identified scam YouTube channels like @todd_tutorials, which posted videos guiding viewers through the process of deploying malicious smart contracts disguised as legitimate MEV tools.
An analysis of some of these smart contracts reveal that they have collectively generated thousands of dollars for scammers.
A Highly Profitable Scam
Wallets associated with the fake trading bot scam have drained crypto worth hundreds of thousands of dollars.
For instance, an address that processed funds from the smart contract promoted by @todd_tutorials received around 7.6 ETH worth nearly $29,000 as of Aug. 7.
The most profitable scam discovered by Sentinel Labs related to a YouTube video posted by Jazz_Braze. The scam contract address linked to that video yielded 244.9 ETH worth over $929,000.
Tactics for Promoting Scam Content
According to Sentinel Labs, some of the scam YouTube channels used AI-generated voice and video.
The use of AI helps scammers churn out content much faster and at a lower cost that they would be able to otherwise.
It is worth noting that the most successful scam video posted by Jazz_Braze didn’t feature AI-generated content.
The channel in question hosts a range of videos and shorts that aren’t related to crypto and have been posted for more than two years.
This suggests the account may have been purchased by scammers seeking a credible platform to promote fake trading bots.
Recommended Secure Partners
James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
