PeckShield, a blockchain security company, has sounded the alarm after discovering dozens of tokens that falsely claim to be associated with the AI-powered chatbot ChatGPT.
PeckShield claims that in a "pump and dump" or "rug pull," at least two of the tokens have lost approximately 100% of their value and a third is at a 65% loss.
In a classic pump-and-dump scheme, the scheme's architects launch a publicity campaign full of falsehoods and exaggeration to convince would-be investors to buy tokens, and then sell their holdings in the project at a profit.
The company said in a new post that it believes at least three "BingChatGPT" tokens are honeypots, or malicious smart contracts designed to deceive users into sending Ether (ETH) that can later be stolen by an attacker.
According to PeckShield, "Deployer 0xb583" is at least one of the nefarious actors behind the tokens and is responsible for creating "dozens of tokens with a pump & dump scheme."
PeckShield did not elaborate on why the scammers are using the name BingChatGPT for their tokens, but they may be capitalizing on the news that OpenAI's ChatGPT technology is being integrated into Bing and Microsoft's Edge web browser, which was announced on Feb. 7.
Perhaps the coin's name was chosen to capitalize on the interest in artificial intelligence chatbots by leading potential victims to believe the token has some connection to Microsoft.
Over 10,000 new coins created in 2022 have all the on-chain hallmarks of becoming pump-and-dump schemes, according to a report published by blockchain analytics firm Chainalysis.
The Blockchain analytics company reports that of the 1.1 million tokens released in 2017, only 40,521 had an "impact on the crypto ecosystem," meaning they were traded at least 10 times over the course of four consecutive days in the week following their launch.
The company found that of the 40,521 tokens issued in 2022 that achieved enough traction to be analyzed, 9,902 (or 24%) witnessed a price fall in the first week, suggesting likely pump-and-dump behavior.
The company highlighted that it studied 25 tokens in particular and discovered "they were almost certainly designed for a pump and dump," with malicious honeypot programming that stops new buyers from selling the token, albeit a price reduction in and of itself is not evidence of wrongdoing by the token's designers.
