How to detect scam tokens: a guide for beginner investors
Cryptocurrency projects are created for different purposes: some solve real-world problems by simplifying payments and making financial services accessible worldwide, while others are designed to deceive unsuspecting digital asset users.
According to estimates by the analytics company Chainalysis, scammers received at least $17 billion through cryptocurrency schemes in 2025. A significant portion of these schemes traditionally consists of scam tokens, fake projects, and various forms of rug pulls.
What are scam tokens?
A scam token is a cryptocurrency created solely to deceive investors and is not intended to function as a legitimate project.
The primary goal of any scam token is to persuade investors to purchase the asset by any means possible. As a rule, after buying such tokens, investors cannot sell them profitably because they eventually lose their value. According to a study by Fool, victims of scam tokens suffered financial losses in nearly 80% of cases.
In some instances, scam tokens cannot be sold at all. For example, fraudsters may incorporate special functions into the smart contract of their asset to freeze or block tokens held in users' wallets.
The prevalence of scam tokens is explained by their accessibility and low cost of creation. Virtually anyone, even without programming experience, can launch their own scam token with minimal effort and expense, spending primarily on promotion.
Additional evidence of the scale of the problem comes from TokenSniffer data. As of June 2026, the service, which specializes in analyzing smart contracts, tracks more than 52 million tokens and has identified over 7 million fraudulent projects. This demonstrates that scam tokens are appearing in the crypto industry almost continuously.
Types of scam tokens
The most common types of scam tokens include:
- Fake cryptocurrencies. These assets disguise themselves as well-known projects. Following the success of popular projects such as the meme coins Pepe (PEPE) or Official Trump (TRUMP), numerous clones typically emerge, created for fraudulent purposes. This method of deception is also known as phishing.
- Standard scam tokens. These are original cryptocurrencies with a specific narrative, but they were created exclusively to deceive investors.
- Honeypots. These scam tokens allow users to purchase the cryptocurrency but prevent them from selling it due to intentionally embedded restrictions in the smart contract.
- Scam tokens with hidden minting capabilities. These assets often resemble ordinary cryptocurrencies and may not initially raise suspicion. However, examination of the smart contract reveals that the creator can mint and sell an unlimited number of tokens at any time, effectively driving their value to near zero.
There are also other variations of scam tokens. For example, the creator of a fraudulent cryptocurrency may embed functions in the smart contract that allow wallet balance manipulation, token burning, or reduced transaction limits, making it impossible for specific users to spend their assets.
What is the difference between scam tokens and shitcoins?
Despite certain similarities, scam tokens and shitcoins differ in several important ways. Generally, shitcoins are created for personal enrichment and do not necessarily involve deliberate deception of investors; in some cases, they may have no purpose at all.
Unlike intentionally malicious scam tokens, shitcoins are often launched as jokes, and some may even develop their own communities over time. For example, this happened with the meme coin Grimace, whose value increased 100,000-fold amid widespread attention on social media.
Nevertheless, scam tokens can be considered a subset of shitcoins, since both ultimately lack real utility.
How to identify scam tokens
It is possible to determine whether a cryptocurrency is a scam token using specialized tools. These include blockchain explorers such as Blockchair, Etherscan, and BSCScan.
One indicator of a scam token is a high concentration of the cryptocurrency in a small number of wallets. This can be verified using blockchain explorers. On Etherscan and similar platforms, each cryptocurrency has a dedicated page showing wallet distribution and the number of tokens held by each address.
Another important indicator of scam tokens is the unrealistic promises they make to investors. Fraudsters typically rely on aggressive marketing campaigns to promote their scam tokens, creating unrealistic expectations and triggering FOMO (Fear of Missing Out) among potential victims.
According to Chainalysis, scammers are increasingly using artificial intelligence to create fake videos, fabricated interviews, and celebrity deepfakes. As a result, scam tokens appear more trustworthy, and advertising campaigns become significantly more convincing to inexperienced investors.
Another important tool for detecting scam tokens is contract verification. This can be performed manually using blockchain explorers or with the help of specialized tools, including those powered by artificial intelligence.
There are also dedicated services that maintain databases of scam tokens:
- TokenSniffer
- De.Fi Scanner
- Honeypot.is
- RugDoc
- GoPlus
- QuillCheck
Thanks to these services, there is no need to independently analyze suspicious smart contract functions. If a cryptocurrency appears on the blacklist of at least one of the services mentioned above, there is a high probability that it is a scam token (a fraudulent digital asset), and investing in it may result in financial losses.
Another useful resource is expert communities on forums and thematic discussion groups. These communities not only provide valuable information about specific cryptocurrencies but also allow users to seek advice directly from experienced participants. Experts can help identify warning signs of scams and prevent beginners from investing in scam tokens.