Introduction
In just 58 days, the BEC token (also known as "Beauty Chain") experienced one of cryptocurrency's most dramatic collapses - plummeting from a peak market valuation of $28 billion to near zero.
This report examines BEC as a representative case study highlighting critical risks in cryptocurrency projects, including:
- Centralization risks - 99.9% of tokens initially controlled by 4 team addresses
- Documentation deficiencies - No technical whitepaper, missing team profiles
- Market manipulation - Clear signs of price control with 99.93% supply concentration
- Smart contract vulnerabilities - Exploited by hackers via ERC-20 BatchOverFlow attack
Project Background
BEC gained notoriety due to its rumored (but never confirmed) association with Meitu, a Chinese photo-editing app whose chairman Cai Wensheng is a prominent crypto investor. At its peak, BEC's market cap quadrupled Meitu's stock valuation.
Key project flaws from inception:
Zero technical documentation
- No whitepaper covering blockchain architecture
- No developer team profiles
- Only brief economic model outline
Extreme token concentration
- Four wallets held 99.9% supply
- Remaining 6,000+ wallets shared 0.067%
Overhyped partnerships
- Meitu collaboration terminated on April 25
- No substantial ecosystem development
The Collapse Timeline
| Date | Event | Impact |
|---|---|---|
| Feb 2018 | BEC token launch | Initial valuation $28B |
| Apr 22 | BatchOverFlow exploit | Hacker minted unlimited tokens |
| Apr 25 | Meitu partnership termination | Lost main commercial backing |
| By Apr 30 | Price collapse | ~100% value loss |
Critical Lessons for Investors
Vet technical fundamentals
- Demand complete whitepapers
- Require open-source code audits
Analyze token distribution
- Avoid projects with >20% supply concentration
- Check wallet balances via blockchain explorers
Partnership due diligence
- Verify official announcements
- Distinguish real integrations from marketing
👉 Learn how to spot red flags in crypto projects
FAQ Section
Q: What caused BEC's price crash?
A: Combined effects of the smart contract hack, loss of Meitu partnership, and pre-existing supply concentration.
Q: How was the hacker able to mint unlimited tokens?
A: By exploiting an integer overflow bug in the ERC-20 batch transfer function.
Q: What percentage of tokens did regular investors actually hold?
A: Just 0.067% across 6,000+ wallets - making it essentially a centralized asset.
Q: Are there still active BEC tokens circulating?
A: The project was effectively abandoned after April 2018, though some tokens may exist in dormant wallets.
Q: What protections exist against similar exploits today?
A: Modern audits now check for overflow/underflow vulnerabilities, and safer token standards like ERC-223 have emerged.
Conclusion
The BEC case demonstrates how projects combining poor documentation, centralized control, and unverified partnerships create perfect conditions for catastrophic failure. Investors must prioritize:
- Technical transparency
- Decentralized distribution
- Verified ecosystem growth