Crypto Scammers Use AI Craze to Deceive Investors

Scammers are taking advantage of the recent craze surrounding artificial intelligence (AI) chatbots by launching and selling fake crypto coins named after Microsoft’s chatbot ChatGPT. 

Blockchain analysis firm Peckshield reported that in the first seven weeks of 2023 alone, many dozens of sham crypto tokens passing as official ChatGPT cryptos have been launched. Genuine AI-related crypto tokens, like Fetch.ai's FET, SingularityNET's AGIX and Ocean Protocol's OCEAN, have been bypassed in favor of ChatGPT tokens, some of which are gaining in value quickly.

These are so-called honeypot scams, where malicious actors create fake cryptocurrencies to lure unsuspecting victims into investing, sending or trading crypto tokens. Often, investors are pressured to enter the market quickly or miss out, but they never get their money back.

Fake tokens have proliferated following Microsoft's move to integrate its OpenAI chatbots into its search engine services. In the last week alone, dozens more BingChatGPT fake crypto tokens have been newly created, each featuring tell-tale signs of being a scam, such as high sell taxes and rapidly falling values after an initial climb.

Unfortunately, this is not a new trend. With crypto still being unregulated, it is plagued by a high number of illicit activities. Crypto market integrity platform Solidus Labs revealed that between September 2020 and December 2022, more than 200,000 fraudulent crypto tokens were created, duping over two million buyers who invested their money only to lose funds when founders took the cash and ran.