BingChatGPT" pump & dump tokens appear to be part of honeypot schemes
Blockchain security firm Peackshield on Twitter said it has found dozens of pump-and-dump tokens purporting to be related to artificial intelligence (AI) powered chatbot ChatGPT.
BingChatGPT token was found to be part of honeypot schemes a smart contract that tricks a user into sending Ethereum which the attacker then traps and retrieves.
Peackshield said that two of the tokens identified have already lost nearly 100% of their value.
In a pump-and-dump scheme, the creators usually initiate a strategy of false statements and exaggerated hype in order to encourage investors to buy tokens. They then sell their own share in the scheme covertly as soon as the prices rise.
Peckshield claimed that "Deployer 0xb583," one of the malicious individuals behind these tokens, is accountable for developing "numerous tokens utilizing a pump & dump strategy."
#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%.
— PeckShieldAlert (@PeckShieldAlert) February 20, 2023
Deployer 0xb583 has already created dozens of tokens with a pump & dump scheme #AI #ChatGPT pic.twitter.com/merQikuslk
PeckShield did not clarify the reason behind the bad actors utilizing the name BingChatGPT for their tokens. However, it is possible that the scammers are attempting to exploit the recent integration of OpenAI's ChatGPT technology into Bing and Microsoft's web browser Edge, which was announced on February 7th.
The token's name may be an attempt to trick victims into thinking they are somehow related to Microsoft and take advantage of the Hype around AI chatbots.
As per a report by Chainalysis on February 16, the blockchain analytics firm observed that around 10,000 newly launched tokens in 2022 exhibited all the on-chain features of pump-and-dump schemes.
Chainalysis firm launched 1.1 million tokens last year. but 40,521 tokens impact the crypto ecosystem with at least ten swaps over four consecutive days of trading in the week following their launch.
According to the firm, the 40,521 tokens launched in 2022 that gained traction to be worth analyzing 9,902 or 24% saw a price decline in the first week indicating possible pump and dump activity.
Although a price decrease alone does not necessarily imply any misconduct by token creators, Chainalysis scrutinized 25 tokens and discovered that they were highly likely to be devised for a pump-and-dump scheme. These tokens had malevolent honeypot codes that barred fresh buyers from selling the token.
Related: Crypto Twitter uses new AI chatbot to make trading bots, blogs and songs
