Your wallet may show a dollar balance for fake USDT that you cannot sell
Keeper wallets maintained the quotations through restricted pools, where Forta's simulated outside sales failed for all 32 identified tokens. Read the full story on CryptoSlateUnderstand the crypto stories that matter and what to watch next. Get The Catalyst in your inbox
Fake USDT could show a convincing dollar balance in a wallet while its holder was unable to sell it through the market supplying that price, according to a Nov. 10 investigation by blockchain security firm Forta.
The researchers identified 32 tokens whose prices were maintained in successive periods by wallets repeatedly trading through restricted pools. When Forta simulated an outside wallet trying to sell at the midpoint of each pool's active window, all 32 rejected the swap.
That left a gap between the dollar value a wallet could display and the value an ordinary holder could obtain through the identified market. A familiar token name, a completed transfer and a convincing balance could all appear together for a seller accepting crypto without delivering the genuine asset.
Forta traced the pricing mechanism to PancakeSwap Infinity pools pairing counterfeit tokens with real USDT. Automated wallets, which the researchers call keepers, repeatedly made small round-trip trades to keep the latest pool price near a dollar.
The pools' swap hooks restricted trading to wallets on the operators' allowlists. The keepers could maintain the quotation while an outside holder's attempt to exchange the counterfeit for real USDT failed in Forta's tests.
PancakeSwap's developer documentation describes callbacks that run before or after actions such as swaps, with the hook and its callback permissions specified when a pool is initialized. Forta's findings concern how particular pools used that flexibility to restrict access.
A recent trade sets the price for that trade, so reading the pool's last price can produce an apparently stable dollar quotation without providing a usable exit for the holder.
Forta measured median prices between $0.99 and $1.005 across the 32 tokens. The rotation began Feb. 19 and continued through at least Nov. 3, with individual tokens usually maintaining their prices for two to 19 days.