PeckShield, a company that specializes in blockchain security, has sounded the alarm after discovering hundreds of tokens that falsely claim to be tied to the artificial intelligence (AI) powered chatbot ChatGPT.“
In a post dated February 20, the company disclosed that at least three “BingChatGPT” tokens seem to be part of honeypot scams. A honeypot strategy is a kind of smart contract that deceives a user into contributing Ether (ETH), which the attacker subsequently captures and collects.
In what is commonly known as a “pump and dump” scheme or a “rug pull,” PeckShield reports that at least two of the identified tokens have already lost nearly 100% of their value, while a third is at a loss of 65%. This type of scheme involves the purchase of an asset with the intention of quickly selling it at a higher price.
Typically, the organizers of a pump-and-dump scheme would orchestrate a campaign of deceptive claims and hype to entice investors to purchase tokens, and then they will discreetly sell their interest in the plan as prices go up. This is done in order to make a profit from the scam.
According to PeckShield, at least one of the malicious actors behind the tokens is known as “Deployer 0xb583,” and he is responsible for the creation of “dozens of tokens using a pump and dump strategy.”
PeckShield did not provide an explanation as to why the malicious actors are using the name BingChatGPT for their tokens; however, it is possible that the scammers are attempting to capitalize on the announcement made on February 7 that OpenAI’s ChatGPT technology will be integrated into Bing as well as Microsoft’s Edge web browser.
It’s possible that using the name “Microsoft Token” is an effort to fool victims into believing they are connected to Microsoft in some way, in order to capitalize on the buzz surrounding AI chatbots.
A research published on February 16 by the blockchain analytics company Chainalysis stated that approximately 10,000 new tokens created in 2022 exhibited all the on-chain hallmarks of being pump-and-dump operations. This information was recently made public.
According to the Blockchain analytics company, there were 1.1 million tokens released in 2018, but only 40,521 had a “effect on the crypto ecosystem.” This means that there were at least 10 swaps during four consecutive days of trading in the week after their introduction.
The company said that of of the 40,521 tokens that were introduced in 2022 and got sufficient momentum to be worth investigating, 9,902 or 24 percent had a price fall in the first week that was suggestive of likely pump and dump behaviour.
The company noted that it examined 25 specific tokens and found that “they were almost certainly designed for a pump and dump,” with malicious honeypot code that prevents new buyers from selling the token. While a price drop on its own is not an indication of wrongdoing on the part of token creators, the company noted that it examined 25 in particular and found that “they were almost certainly designed for a pump and dump.”