Coinbase Removes Three Token “How To Buy” Tutorial Involved “Carpet Pull”

Coinbase Global has removed the 'how to buy' instructions for the three crypto tokens. (photo; doc. coinbase)

JAKARTA - Coinbase Global has removed 'how to buy' instructions for three crypto tokens that had been the subject of warnings of a possible 'carpet pull'. This allows investors to lose their money because of the fraud.

Coinbase party, Thursday, February 10 last stated that it plans to increase protection on user accounts.

Jaclyn Sales, a spokeswoman for Coinbase, said the links were removed from the cryptocurrency exchange's website after they came to attention this week by Reuters. In addition, there will also be increased protection on automatically generated web pages.

Nasdaq-listed Coinbase features a page offering tips on investing in tokens and the page in question is informational rather than making it available for trading on its app or wallet.

Sales said the page, which contained a disclaimer that the information was not investment advice and that the exchange was not responsible for "errors and delays", was created automatically from information carried by data site CoinMarketCap.

CoinMarketCap said it was not aware of the Coinbase page and its vice president of growth and operations, Shaun Heng, said there was no partnership with Coinbase.

The sale said it was unclear whether Coinbase carried out any checks on coins whose information pages were removed. Coinbase will "build a stronger disclaimer for automatically generated pages," the exchange told Reuters on Thursday by email.

Coinbase will also "establish processes to remove other pages that have been flagged by CoinMarketCap as fraudulent," he said, adding that "assets associated with known fraud cannot be traded on exchanges".

One page removed by Coinbase featured DeFi100 and told users to check CoinMarketCap to find out where it could be purchased.

However, the DeFi100 page on CoinMarketCap warns: "We have received many reports that this project has come out as a scam. Please be careful."

CoinMarketCap, which does not sell cryptocurrencies on its website, said that the DeFi100 token has not recorded daily trading volume since November 14.

The DeFi100 website and Medium blog page are offline. His last tweet was in May last year. CoinMarketCap did not respond to requests for comment on DeFi100 or its warnings.

Twitter users alleged in May that DeFi100 had carried out a "carpet pull," in which investors deposited money in bogus projects before the coin's developers ran off with the funds.

DeFi100 denied the allegations in one of its last tweets, on May 23. Acknowledging investors had suffered losses, he said he hoped to "rebuild the project".

Coinbase also removed a page displaying a token called Mercenary which, like DeFi100, was not available in the Coinbase app or wallet.

Mercenary launched in January, hitting a high of nearly $20. But on Jan. 26 it fell within minutes from just over $8 to a fraction of a cent and the price has yet to recover, CoinMarketCap data shows.

Blockchain security firm PeckShield tweeted on January 26 that Mercenary had been hit by a carpet tug and warned buyers of it. Reuters was unable to contact Mercenary, while the website and Twitter page were both offline.

It's unclear when Coinbase launched its page on Mercenary, where an archived web page shows CoinMarketCap was first featured on January 15. CoinMarketCap did not respond to a question whether Mercenary had been removed from its system.

Coinbase has also removed the page on its token named Squid Game which fell to nearly zero in November in what cyber security experts say was another carpet pull. It is also not available on the Coinbase app or wallet. Read more

The website and Medium account behind the SQUID token quickly went offline after the project unraveled and remained inactive. Twitter also suspended the project's account, saying it violated network rules.

The developers behind SQUID said on Telegram in November that they were abandoning the token, saying "someone tried to hack our project".