PeckShield discovered evidence of “pump & dump” scheme in BingChatGPT tokens: Nearly 10,000 newly released tokens in 2022 show all the hallmarks of this fraudulent activity
PeckShield, a blockchain security firm, has raised concerns about several tokens claiming to be affiliated with the artificial intelligence chatbot ChatGPT.
According to a February 20 post, this firm identified several “BingChatGPT” tokens as part of “honeypot” schemes. These smart contracts are designed to trick users into sending Ether, which is then captured and recovered by the attacker.
PeckShield reported that two of the identified tokens lost nearly 100% of their value, while the third lost 65%. This is often referred to as a “ pump & dump “ or “rug pull” scheme.
A pump-and-dump scheme typically involves manipulating the price of a token by artificially inflating its value through misleading statements and promotions to encourage investors to buy.
After the price has risen, the creators of the scheme sell their share of the project for a profit, leaving other investors with tokens that have lost value.
PeckShield stated that “Deployer 0xb583” was responsible for creating “dozens of pump & dump tokens”.
PeckShieldAlert on Twitter: "#PeckShieldAlert PeckShield has detected dozens of newly created #BingChatGPT tokens, of which 3 appear to be #honeypots & 2 have high sell tax. 2 of them have already dropped over -99%.Deployer 0xb583 has already created dozens of tokens with a pump & dump scheme #AI #ChatGPT pic.twitter.com/merQikuslk / Twitter"
PeckShieldAlert PeckShield has detected dozens of newly created #BingChatGPT tokens, of which 3 appear to be #honeypots & 2 have high sell tax. 2 of them have already dropped over -99%.Deployer 0xb583 has already created dozens of tokens with a pump & dump scheme #AI #ChatGPT pic.twitter.com/merQikuslk
Why the scammers behind BingChatGPT tokens use this name is not clear. However, it may be trying to take advantage of the February 7 announcement that OpenAI’s ChatGPT technology is being integrated into Microsoft’s Bing search engine and Edge web browser.
The integration allows users to ask questions and receive answers in natural language instead of using traditional keyword searches. The name “BingChatGPT” could have been chosen to create the impression that the tokens are related to this integration or that they are in any way affiliated with OpenAI or Microsoft.
However, there is no evidence to suggest that these tokens have any legitimate connection to these companies.
According to a February 16 report by blockchain analytics firm Chainalysis, nearly 10,000 newly launched tokens in 2022 exhibited all the on-chain characteristics of a pump & dump scheme.
This means the tokens were likely created to defraud investors by artificially inflating their value before the creators sell their stake for a profit.
Of the 1.1 million tokens launched in 2022, only 40,521 had a significant impact on the crypto ecosystem. These tokens had at least ten exchanges in four consecutive trading days in the first week of their launch.
Of these tokens, 9,902 (24%) experienced a drop in price in the first week of trading, suggesting possible pump-and-dump activity.
Chainalysis examined 25 such cases and found that they were likely designed for a pump-and-dump scheme with malicious honeypot code that prevented new buyers from selling the token.
This recent finding by PeckShield highlights the need for investors to be cautious when investing in newly launched cryptocurrencies or tokens. It is important to do thorough research and analysis before investing in any crypto project.
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Blockchain security firm raises alarm over ‘BingChatGPT’ pump & dump tokens was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.