Daniel Walker
A growing network of crypto scammers is abusing long-established YouTube accounts to promote fake trading bots that trick users into deploying malicious smart contracts. These contracts stealthily drain victimsโ wallets, leading to significant financial losses.
SentinelLABSโ senior threat researcher Alex Delamottea has raised the alarm on this widespread and ongoing scam. He warns that crypto users who blindly trust tools promoted in unverified video tutorials risk falling victim to sophisticated theft operations disguised as lucrative opportunities.
The scam begins with YouTube videos claiming to guide users on profitable crypto trading bots, often created with AI-generated visuals and narration. These videos redirect viewers to external websites hosting smart contract code.
Users are encouraged to deploy this code using platforms like Remix, believing they are activating legitimate arbitrage or MEV (Maximal Extractable Value) bots. However, the contracts are intentionally crafted to hide an attacker-controlled wallet through techniques like XOR operations, string concatenation, or hexadecimal address derivation.
Once the victim funds the deployed contract โ typically by depositing a minimum of 0.5 ETH to cover โgas feesโ and boost profits โ hidden failover mechanisms enable the attacker to siphon off the assets. Alarmingly, even if the user does not fully activate the contract, fallback code can still give the scammer control.
Scammersโ Gains and Laundering Efforts
Delamotteaโs research uncovered multiple scammer-controlled wallets. The most prominent, linked to a YouTube user named โ@Jazz_Brazeโ, received 244.9 ETH, worth over $900,000.
Further tracking showed these stolen funds moved through dozens of secondary wallets, indicating active money laundering attempts. Other scam wallets netted smaller yet significant amounts, often exceeding $10,000 in ETH each.
Many involved YouTube channels showcased AI narrators, heavily moderated comments that suppressed criticism, and fake success testimonials to build trust. These channels were often aged accounts with prior crypto or pop culture content, some likely acquired through Telegram groups or online marketplaces โ a tactic that increases their credibility and visibility.
Legitimate Crypto Trading Bots vs. Malicious Fakes
In the cryptocurrency world, trading bots are automated programs designed to execute trades faster and more efficiently than humans, capitalizing on market opportunities. Some bots, such as MEV bots, strategically extract value by analyzing transaction orders on the blockchain.
However, while legitimate bots are powerful tools for traders, bad actors exploit the concept by creating fraudulent bots with harmful smart contracts that steal funds.
A notable example of misuse includes the MEV sandwich bot โarsc,โ which scammed nearly $30 million from Solana users by front-running transactions.
Key Advice for Crypto Traders: Beware of Social Media Promises
SentinelLABS cautions investors to be highly skeptical of trading bot code shared via social media or influencer videos, especially those promising unrealistic returns.
โIf it sounds too good to be true, it usually is โ particularly in the crypto space,โ warns Delamottea.
Traders are urged to avoid deploying unverified smart contracts and to perform thorough due diligence before trusting any online crypto tool.
