Beware: Crypto Scammers Have A New Way Of Deceiving Investors And They're Exploiting The AI Craze

Malicious actors are trying to cash in on the ongoing craze surrounding artificial intelligence (AI) chatbots by flooding the market with fake crypto tokens branded after the popular chatbot ChatGPT, luring investors via honeypot schemes.

Since the start of 2023, investors both institutional and retail, have grown interested in AI-related crypto tokens like Fetch.ai's FET, SingularityNET's AGIX, and Ocean Protocol's OCEAN, among many others, triggering significant gains on these crypto assets' value.

But, along with those gains and unprecedented popularity is the surge in the number of scams trying to take advantage of the craze.

This week, blockchain security company PeckShield reported several dozens of scam crypto tokens posing as ChatGPT-related assets, deceiving investors to invest in tokens that are not actually related or associated with the popular chatbot created by OpenAI.

Interestingly, these fake tokens started to surface online following Microsoft's move to integrate OpenAI's chatbots into its search services on the tech giant's internet browsers.

Of the hundreds of fake crypto tokens, 132 were issued on BNB Chain, a blockchain service that allows developers to build their decentralized apps with smart contracts, 25 tokens were on Ethereum and 10 other tokens were issued by Cronos, Arbitrum, Solana and OKChain.

Peckshield said that as of Monday, dozens more of BingChatGPT fake crypto tokens were newly created, three of which appeared to be "honeypots," two had "high sell tax," and two others "already dropped over -99%."

The blockchain also discovered that "Deployer 0xb583 has already created dozens of tokens with a pump & dump scheme."

Honeypot scams are a prevalent type of nefarious activity in the crypto space. This activity involves offering a fraudulent product to investors in exchange for getting extra funds after transferring a certain amount of funds. Although, in reality, investors will never get their money back.

The most recent on-chain analysis revealed that at least 170 crypto tokens are using the name ChatGPT, with BNB as the most common issuer.

It is worth noting that despite's Microsoft's hype in integrating Open AI's ChatGPT chatbot into its products, so far, it has never announced any official cryptocurrency projects.

Chainalysis, the American blockchain analysis firm, reported that crypto investors lost billions of dollars to scams and highlighted that in 2022 cryptocurrency investors had lost almost $3.8 billion to hackers and around $3.3 billion in 2021.

Crypto market integrity platform Solidus Labs revealed that between September 2020 and December 2022, more than 200,000 fraudulent crypto tokens were created, deceiving over 2 million investors who placed their funds to rug pull and exit scams.