With institutional and retail traders each turning their consideration to AI final month, AI-related crypto tokens reminiscent of Fetch (FET), SingularityNET (AGIX), and Ocean Protocol (OCEAN) noticed vital positive factors all through January.
Nevertheless, concurrent to these positive factors 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.
The usage of a honeypot rip-off is widespread in crypto. A honeypot rip-off includes a fraudulent supply to traders that they may obtain further funds after transferring an preliminary sum, however in actuality, they may by no means obtain their a refund.
Immediately, with investor curiosity skyrocketing in AI within the wake of Microsoft’s eye-watering $10 billion funding 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 Defend’s evaluation discovered that at the least 20 tokens at present bear the identify BingChatGPT in the marketplace. Of those, 12 are on Binance’s BNB Chain, six have been created on Ethereum, and two extra on Arbitrum.
In accordance with on-chain evaluation, a staggering 170 tokens are actually utilizing the ChatGPT identify, with BNB the commonest 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, nevertheless, growing.
Final yr, crypto traders misplaced practically $3.8 billion to hackers— up from $3.3 billion in 2021—in keeping with a Chainalysis report.
Honeypot scams growing
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 traders falling sufferer to rug pulls and exit scams involving them.
On April 19, 2022, PeckShield recommended 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 traders shilled into the token. Every week earlier, the token surged over 700% in an hour. The undertaking’s web site and social media accounts remained energetic 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 yr, the web3 undertaking Squid Recreation (SQUID) was closely hyped because of the reputation of the Squid Recreation Netflix collection. The undertaking scammers took off with $5.7 million from funds by draining the liquidity pool, utilizing an internet site with a number of grammatical errors and that includes an anti-dump mechanism.