Brazilian cryptocurrency has a code created to harm those who buy

Charlie Taylor

Holders of the Brazilian shitcoin Xiglute Coin (XGC), launched at the end of April, are trying at all costs to generate hype around the currency, based on Ethereum's ERC-20 standard. The supposed cryptoactive, however, accumulates a series of suspicious characteristics that call into question the project, created by businessman Dário Cândido de Oliveira, from Uberlândia (MG). The first warning sign is the concentration of coins in the hands of their creator. XGC, which was born to be the native token of a social network with the same name, founded by Oliveira in 2013, has a supply of 210 trillion tokens. Of this total, however, less than 1% is distributed among the 2.1 thousand holders. The remaining 99% — more than 208 trillion XGC —  are concentrated at the parent address, under the control of the developer who created the project. “He (owner) can sell anything he wants as long as the currency is in more exchanges and appreciates. Those who bought the token thinking that the platform has millions of users and will be worth something one day will end up having their money wasted”, says Gustavo Toledo, developer and founder of the Coinsamba platform, in a brief analysis of the project on request of the report.

code hides malicious command

The most serious problem, however, is hidden in the cryptocurrency code. Token Sniffer, a website that performs automated contract auditing for malicious lines of code, found that in Xiglute Coin's smart contract (XGC) there is a command that allows the developer to pause all transactions anytime they want. “Since the token has a pauseable contract, the developer can — when the token is worth something — sell the coins it owns and then pause the contract. Nobody who has the token in their wallet will be able to transfer it”, explains Toledo. Test shows malicious ‘pause’ command in Xiglute Coin smart contract. (Source: Token Sniffer) In the opinion of the expert, who has already revealed problems in the code of another Brazilian shitcoin, REAU, it is normal to use parts of a generic ERC-20 contract to create a token. The pause command, however, is out of the ordinary and is a red light.

more suspicious

Another suspicious feature of the currency is its form of purchase. According to the tutorial published in the Telegram group, the user needs to make a Pix to XIGLUTE REDE SOCIAL LTDA's Banco do Brasil account so that the project itself can send the tokens to their address. Unlike a normal direct purchase on the blockchain that happens almost instantly, the user needs to wait up to three days to have the tokens in their hands. Despite the deadline, the group on the Xiglute Coin Telegram is full of users complaining about the delay in receiving the coins. User complaint on Xiglute's Telegram. XGC has little liquidity on the two exchanges on which it is listed. According to CoinMarketCap, the asset is available at brokers P2PB2B and Txbit.io. At first, XGC has a volume of US$ 160,000, while at last the order book is practically stopped, with a volume of US$ 0.02 in the last 24 hours. Another XGC flaw is its white paper, which is practically an identical copy of SafeMoon's white paper. The essential document for any cryptocurrency project has almost no original text, with the developer just changing the name and fee amounts. Comparison between SafeMoon and Xiglute Coin white paper.

misleading advertising

The project behind the coin masks this series of problems by investing heavily in marketing and social engineering to sell the false promise that all holders will get rich when shitcoin appreciates in the future. The 6,000 users participating in the XGC Telegram group are also encouraged every day by moderators to speak highly of the token on social media and praise it on industry pages. In a live broadcast last month, the creator of the project, Dário Cândido de Oliveira, said that the unknown platform is the “largest Brazilian social network”, supposedly has more than 22 million users in every country in the world and is able to reach to places that “not even Google enters”. He also showed the appreciation that respected cryptocurrencies in the market – such as bitcoin – have had over the years to persuade users that the same will happen with Xiglute Coin. “If I invest US$1,000, I would have 500 million Xiglute Coin (XGC)… In the future, I would have a million dollars. (…) The risk here is of becoming a multimillionaire, I want you to buy this idea with me”, promises the live presenter saying that he even made his grandmother buy shitcoin. He also said that XGC “is the best ranked Brazilian cryptocurrency in CoinMarketCap. This is very strong, it is powerful information”. And fake. The current XGC rank in the aggregator is 3,456th, far removed from other tokens that have emerged in the country such as Hathor (295th), Currency (804th), Lunes (1,403th) and many others. Another inaccuracy was the claim that the cryptocurrency is listed on Coinbase, the largest US cryptocurrency broker. Dário even suggested that he has some relationship with the exchange: “We already have a little foot there and in some conversations with them; there is something new ahead”. The cryptocurrency actually appears in Coinbase's price aggregator, alongside thousands of other currencies that are automatically displayed depending on your market capitalization. According to CoinGecko, the XGC is worth R$ 0.000012 this Tuesday (31), about 90% less than its historic high of R$ 0.0001 it reached during an isolated peak in May. The currency is also quite volatile, with large price fluctuations with each major move that takes place in the blockchain, as you can see in the graph of the last 7 days. Xiglute Coin price fluctuations in the last 7 days. (Source: CoinGecko)

eyeing the coup

Thousands of unsubstantiated cryptocurrencies are launched on the market every day, and a significant portion comes out for the sole purpose of sucking money from investors while developers get rich through pump and dump. Pump and dump is a scam in which the project owners who own most of the tokens inflate their price and when it reaches a peak, they liquidate everything in the market, causing the asset to fall and leaving all the smaller holders at a loss. To avoid pitfalls, experts ask people to thoroughly research a cryptocurrency and its fundamentals before investing any money. Furthermore, it is also recommended to look for information about those involved in the project. The report contacted those responsible for Xiglute Coin (XGC), but they did not respond.

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