Emergence of pump and dump tokens with the same name as ChatGPT and Bing search engine

Along with the growing popularity of AI-based chatbots such as ChatGPT and the increasing interest of a segment of the market in investing in AI-based projects, a new wave of pump-and-dump scam projects seems to be emerging. Blockchain security firm PackShield has so far found dozens of fake tokens that claim to be related to chat bot ChatGPT.

According to Cointelegraph, the company announced in an announcement on February 20 (1 March) that at least 3 tokens with the same name as BingChatGPT appear to be part of several honeypot fraud schemes; A smart contract that tricks users into exploiting its (fake) vulnerability to transfer Ethereum balance to their wallet, but in the end the attacker withdraws the contract balance and users’ deposits.

According to Packshield, while at least two of the identified tokens have lost nearly 100% of their value, the price of a third token has fallen by around 65%; A scam often referred to as a pump and dump scheme or rug pull.

Read more: How to identify RugPull projects?

In pump-and-dump scams, creators typically stage a hyped and misleading advertising campaign to entice investors to buy tokens, then secretly withdraw their token-backed liquidity by driving up prices.

Packshield said:

One of the fraudsters behind these tokens named “Deployer 0xb583” has created at least dozens of pump and dump tokens.

While the company did not explain why the scammers are using the BingChatGCT name for their tokens, it appears that they are trying to take advantage of the news that OpenAI’s ChatGPT technology is being integrated into the Bing search engine and Microsoft’s Edge web browser. It was published on February 7 (Bahman 18).

The name of the token may be an attempt by scammers to trick victims into thinking they are somehow related to Microsoft and benefit from the hype of AI-based chatbots.

Blockchain analysis company Chainalysis recently noted in a February 16 report that approximately 10,000 new tokens will be launched on China’s Ethereum and BNB networks in 2022 that have all the hallmarks of pump-and-dump scams. .

According to ChinaAlysis, of the 1.1 million tokens launched last year, only 40,521 tokens have made an impact on the digital currency ecosystem; With a minimum of 10 trades in 4 consecutive trading days within a week of launch.

The company said:

Of the 40,521 tokens launched in 2022 that were valuable enough to be analyzed, 9,902 or 24% of these tokens saw a price drop in the first week of launch, indicating a possible pump-and-dump scam.

ChinaAlysis noted that a price drop in itself is not a sign of fraud by the token creators. However, the company specifically investigated 25 and found that they contained malicious honeypot code that prevented new buyers from selling tokens and were likely designed to pump and dump.