Scam “more gold” token clogs Ethereum network

More Gold Coin (MGC) is reportedly clogging the Ethereum network, causing transaction fees to spike to 20 gwei ($0.10).

The token is being sent out to thousands of addresses, in what looks like a large airdrop. Data from Etherscan shows that there are more than 360,000 addresses that hold the token, with close to 8 million transfers having taken place at the time of writing–with countless more being added. That many transactions would cost the spammer $1.3 million in transaction fees, according to Eric Conner, a product researcher at Gnosis.

The project has drawn suspicion for a number of reasons. Its name appears to be a rip-off of a TrueGoldCoin, a gold-backed cryptocurrency which was itself a failed project that raised a few questions.

Second, its whitepaper makes for a bizarre read, with phrases like, “MGC Token smart wallet has its own hematopoietic function.” A google search reveals “hematopoietic” is a medical term for how the body creates blood from stem cells.

Third, it looks to have staged a marketing video (which has since been removed) and a corresponding photo shoot entitled, “No text just look at the picture, MGC TOKEN Global users pass happiness.” All of which must have cost a fair dime. Oh and it says it’s the most advanced project of all time.

But why go to so much effort and trouble, shelling out millions on transaction fees and staging expensive photoshoots?

According to Mikko Ohtamaa, CTO of Token Market, the whole shebang is designed to get hold of your money. To redeem the rewards from the airdrop, you have to hand over your Ethereum private keys—something you should never do.

On Twitter, some have suggested that the project whiffs of Bitconnect, an infamous crypto-related Ponzi scheme. Others pointed out that the team members are called Abercrombie and Springsteen Brain.

With Ponzi schemes and crypto scams becoming a regular occurrence are we watching another heist slowly unfold?