Tokens fraudulently using the name ChatGPT are scamming investors out of money

With institutional and retail buyers each turning their consideration to AI final month, AI-related crypto tokens akin to Fetch (FET), SingularityNET (AGIX), and Ocean Protocol (OCEAN) noticed vital positive aspects all through January.

Nevertheless, concurrent to these positive aspects has been an uptick in scams, with @PeckShieldAlert saying this week the invention of a number of dozen rip-off tokens related to Bing’s integration of ChatGPT.

Tweet from @PeckShieldAlert
(Supply: Twitter)

The usage of a honeypot rip-off is widespread in crypto. A honeypot rip-off includes a fraudulent provide to buyers that they may obtain further funds after transferring an preliminary sum, however in actuality, they may by no means obtain their a reimbursement.

Immediately, with investor curiosity skyrocketing in AI within the wake of Microsoft’s eye-watering $10 billion investment into OpenAI’s ChatGPT,  information of the language mannequin going viral has additionally been a breeding floor for brand new types of fraudulent exercise.

Peck Protect’s evaluation discovered that at the very least 20 tokens presently bear the title BingChatGPT available on the market. Of those, 12 are on Binance’s BNB Chain, six have been created on Ethereum, and two extra on Arbitrum.

In keeping with on-chain evaluation, a staggering 170 tokens are actually utilizing the ChatGPT title, with BNB the most typical protocol for his or her issuance.

Neither Microsoft nor OpenAI has introduced any official cryptocurrency tasks.

The marketplace for honeypots and different scams in crypto is, nonetheless, rising.

Final 12 months, crypto buyers misplaced almost $3.8 billion to hackers— up from $3.3 billion in 2021—in line with a Chainalysis report.

Chainalysis crypto scam report, 2022
Chainalysis crypto rip-off report (Supply: Chainalysis)

Honeypot scams rising

Between September 2020 and December 2022, it’s estimated by Solidus Labs that over 200,000 fraudulent tokens had been created, resulting in greater than 2 million buyers falling sufferer to rug pulls and exit scams involving them.

On April 19, 2022, PeckShield prompt that the XTZ token could possibly be a honeypot rip-off, which triggered it to plummet by 99.97% inside 24 hours. Regardless of this warning, over 5,000 crypto buyers shilled into the token. Per week earlier, the token surged over 700% in an hour. The undertaking’s web site and social media accounts remained lively even after the numerous drop, that means that even after a undertaking is found to be a honeypot rip-off, in some instances, investor curiosity will stay.

Within the previous 12 months, the web3 undertaking Squid Sport (SQUID) was closely hyped because of the recognition of the Squid Sport Netflix sequence. The undertaking scammers took off with $5.7 million from funds by draining the liquidity pool, utilizing a web site with a number of grammatical errors and that includes an anti-dump mechanism.

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