- The popularity of ChatGPT has spawned a plethora of fake ChatGPT tokens
- Tokens with the name BingChatGPT and symbols such as BINGCHATGPT, BCGPT and BINGGPT have started popping up all over blockchains including large players like Ethereum and BNBChain
- Binance BNB Chain alone hosts as many as 132 different tokens riding on the ChatGPT name
Cryptocurrency and crypto tokens are currently one of the biggest topics in the world. Another hot spiral is the artificial intelligence website ChatGPT which has taken the world by storm with its human-like language model. Well, the popularity of ChatGPT has spawned a plethora of fake ChatGPT tokens that are likely scams trying to capitalise on the attention it is getting.
Fake ChatGPT tokens
In the fast-paced world of cryptocurrency, things move almost at the speed of light. The popularity of cryptocurrency and the popularity of chatGPT have created an opportunity for scammers to fleece people of their crypto. Taking advantage of this many tokens have popped up all over blockchains with names related to chatGPT. The recent integration of ChatGPT into the Microsoft search engine Bing seems have to bring a lot of attention. Tokens with the name BingChatGPT and symbols such as BINGCHATGPT, BCGPT and BINGGPT have started popping up all over blockchains including large players like Ethereum and BNBChain.
How fake token scams work
Fake token scams are pretty much what they sound like. Scammers create a cryptocurrency token for a project that doesn’t exist. This works best when the name of the token is related to something popular that can be easily recognized and therefore trusted by the public. As people flock to buy into the token, assuming that its popularity will lead to a moonshot, the price of the token goes up rapidly. There are several ways this could go next.
A rug pull is a scam in which the creators of the fake token abscond with the money. In essence, the rug pull lures people in and as the price increases, the creators sell off their tokens. Once they have sold off their tokens they generally disappear and abandon the project. It may take a while for the victims to realise the token is a scam but once they do things quickly fall apart.
High sell tax/vesting periods
The fake token may also involve a high sell tax or vesting before the buyer can sell their tokens. High sell fees and vesting periods have the same purpose, to discourage users from selling. While this is happening the price of the token may be rising in the market. However, the rise may be part of a pump-and-dump scheme. Ultimately the result is the same. People lose their cryptocurrency.
Cryptocurrency-watching website PeckShield noted several tokens using the ChatGPT name mushrooming. As many as 132 different tokens riding on the ChatGPT name have been issued on Binance BNB Chain alone, according to reports. There are 25 known fake ChatGPT tokens on the Ethereum network and another 10 on Solana, Arbitrum, OK Chain and Cronos.
#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
— PeckShieldAlert (@PeckShieldAlert) February 20, 2023
In the tweet published by PeckShield, we can see several of these fake tokens identified are from addresses that have been associated with scams in the past or have glaring red flags. There is one in particular that is a known serial rug puller. As noted earlier rug pulls are one of the common outlets for fake token scams. Honeypot is a cyber-security term. A honeypot scam is an offer that is made to look good to lure unsuspecting victims. An offer that is “too good to be true”. As noted with many rug pulls, the fall comes very fast and that’s why PeckShield also keeps a watch on high slippage tokens. The high sell tax is used as a deterrent to people selling their tokens early. As you can see these fake ChatGPT tokens use many tactics that are popular with cryptocurrency scams.
SquidCoin all over again
This brings back memories of the SquidCoin rug pull which capitalized on the popularity of the hit Netflix show Squid Game. The show’s popularity was immense as it broke streaming records in late 2021. A Squidcoin token emerged that claimed to be associated with the show. Squidcoin quickly gained price and popularity. It didn’t take long for it to emerge that the coin was not related to the Squid Game tv show. The damage was already done when the creators abandoned the project and users were left with tokens that quickly became worthless.
In the blink of an eye
The speed of transacting and the size of the cryptocurrency market make everything happen so much faster. The original Ponzi scheme operated by Charles Ponzi himself lasted all of 8 months before things came crashing down around the founder. Many cryptocurrency-related scams happen within an hour. The SquidCoin rug pull lasted all of two weeks. This adds to the complexity of dealing with these nefarious practices.