Blockchain security analysts are urging crypto exchanges to carefully scrutinize deposits as malicious actors ramp up efforts to flood them with fake tokens on the TON network.

Scammers are increasingly exploiting crypto exchange deposit systems, particularly by using fake USDT transactions on the Open Network (TON) as Tether expands its stablecoin support on the network. Data from the blockchain security group Dilation Effect reveals that these malicious actors are spamming exchanges with fake USDT transactions in large volumes.

On-chain activity reviewed by crypto.news shows that at least one bad actor has targeted multiple exchanges, including Binance, Bybit, MEXC, and Gate.io, with fraudulent tokens on TON. Blockchain researchers report that the hacker deployed a fake smart contract for USDT on TON, designed to mimic the metadata of the official smart contract.

While fake deposits are relatively uncommon, blockchain analysts had previously warned about this type of attack in 2023. Analysts from the blockchain firm SlowMist pointed out the unique characteristics of TON transactions. Almost all internal messages sent between smart contracts should be "bounceable," meaning if the target smart contract doesn’t exist or encounters an error, the message will return to the original account.

“If an attacker transfers to an account without a deployed contract and sets it to ‘bounce,’ the deposited amount, after deducting the handling fee, will bounce back to the original account. The exchange sees a deposit record, but the currency returns to the attacker’s account,” SlowMist explained.

The firm also noted that "almost all blockchains face the problem of false deposits," and the TON blockchain is no exception.

There are no indications that the recent spamming activity has led to profits for the bad actors. However, there have been successful attacks on trading platforms with fake tokens. For instance, following a contract upgrade for the GALA token, hackers exploited a loophole to trick the deposit system of Coinhub, a Mongolian crypto exchange, with fake token deposits and withdrew all GALA from the exchange.