PeckShield Discovers Pump And Dump Tokens Linked To ChatGPT

In a recent report on Twitter, a blockchain security firm, Peckshield, revealed several Ponzi scheme tokens linked to a popular chatbot, ChatGPT. As per the report, many tokens have lost more than 60% of their value after creation. 

PeckShield provides products and services to improve the blockchain system’s security, usability, and privacy. These services allow clients to figure out vulnerable areas within their system and create a suitable approach to handle them. Its recent findings center on pump-and-dump digital currencies.

Peckshield Discovers Dozens Of Pump And Dump Tokens

PeckShield’s post states that three of the dozens of BingChatGPT tokens are connected to honeypot schemes. This system typically allows the perpetrators to trick users into releasing their Ether holdings.

The company noted that two of these three coins have already lost almost 100% of their initial value. Meanwhile, the third one has declined by about 65%. This shows that the tokens are a typical example of rug pulls or pump-and-dump schemes.

Perpetrators of this scheme usually create a campaign or system that misleads investors, tricking them into purchasing tokens. Then, when the prices of these coins appreciate, the scammers secretly sell them off, leaving investors with nearly nothing.

According to the blockchain security firm, one of the culprits who pioneered the scheme of creating dozens of tokens was Deployer 0xb583.

However, the company failed to mention why the culprits chose to use the name BingChatGPT for the scam tokens. It could be that the perpetrators were leveraging the announcement about the chatbot released on February 8.

The announcement noted that OpenAI’s ChatGPT tech works with the Edge browser of Microsoft and Bing. So the token’s name might be a way to make investors believe it’s connected to Microsoft, leveraging the AI chatbot hype.

Other Instances Of Pump And Dump Tokens

Another report from a blockchain analytics firm, Chainalysis, about 10,000 newly released digital tokens in 2022 had the potential of being pump-and-dump tokens.

The firm further cited that out of the 1.1 million digital tokens launched in 2022, investors transacted with around 40,521 only. It also noted that this set of tokens had not less than 10 swaps on 4 consecutive trading days in the week after their release.

The blockchain analytics firm also stated that out of the 40,521 tokens that gained traction after their launch in 2022, about 24%, or 9,902, witnessed a decline in their prices within their first trading week. This is also a possible sign of a pump-and-dump scheme.

Although a drop in the price of a token is not enough to dim it as a pump-and-dump scheme, the firm cited that 25 of them showed clear signs of being fraud tokens after a close investigation. These coins had a malicious honeypot code that restrained new investors and buyers from selling them.

Featured image from Pixabay, Chart from TradingView.com