The Number of 'Pump and Dump' Tokens on Bing-ChatGPT is Increasing

PeckShield, a blockchain security firm that specializes in blockchain security, has raised the alarm following the discovery of dozens of tokens that purport to be related to ChatGPT, a chatbot powered by artificial intelligence (AI).

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As the firm revealed in a post on Feb. 20, at least three "BingChatGPT" tokens appear to be part of honeypot schemes. Honeypot schemes involve smart contracts that are designed to trick a user into sending Ether ETH $1,682, which is then captured and retrieved by the attackers.

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Among the tokens identified by PeckShield, at least two have already lost nearly 100% of their value, and a third has already lost about 65% of its value, in what is often referred to as a “pump and dump” scheme or “rug pull.”

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The pump-and-dump scheme typically involves the creator orchestrating a campaign of misleading statements and hype to persuade investors into purchasing tokens, followed by secretly selling their stake in the scheme at a higher price once the price goes up.

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The company believes that at least one of the bad actors behind the tokens, "Deployer 0xb583," has been responsible for the creation and distribution of "dozens of tokens with a pump & dump scheme," according to the report.

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PeckShield has not explained why the bad actors are using the name BingChatGPT for their tokens; however, it is possible that they are trying to take advantage of the recent announcement that OpenAI’s ChatGPT tech will be integrated into Bing and Microsoft’s Edge web browser as part of the integration.

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There is a possibility that the token's name is intended to trick victims into thinking they are somehow associated with the Microsoft brand, in order to take advantage of the hype surrounding artificial intelligence chatbots.

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Chainalysis, a blockchain analytics company, recently released a report in February that noted that nearly 10,000 new tokens launched in 2022 had all the characteristics that would indicate they were pump-and-dump schemes on the blockchain.

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A Blockchain analytics firm has reported that almost 1.1 million tokens were launched last year, but only 40,521 of them had an "impact on the crypto ecosystem," i.e. there were at least ten swaps over four consecutive days of trading following the launch of a token.

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"Among the 40,521 tokens launched in 2022 that gained sufficient traction to be worth analyzing, 9,902, or 24% of the tokens, saw a drop in the price during the first week, which could be indicative of a pump and dump scheme," according to the firm.