Nefarious market participants are attempting to cash in on the ongoing ChatGPT craze in technology circles by issuing fake tokens branded after the artificial intelligence chatbot despite having no official association with the tool.
Hundreds of such tokens have been issued in the past few weeks. Of this, 132 different tokens have been issued on BNB Chain, 25 tokens on Ethereum, and ten separate tokens on other blockchains, such as Solana, Arbitrum, OKChain and Cronos.
These fake issuances follow software giant Microsoft’s move to integrate OpenAI’s chatbots for search services on Microsoft’s internet browsers.
While OpenAI is the creator of ChatGPT – Microsoft’s own chatbot is a bespoke tool and is said to be an improvement over the publicly-accessible ChatGPT.
Scammers are not wasting a chance to monetize on the hype, however. Several “BingChatGPT” have been issued, seeded with liquidity, and are seeing thousands of dollars in trading volumes – despite red flags.
“PeckShield has detected dozens of newly created #BingChatGPT tokens, of which 3 appear to be #honeypots & 2 have high sell tax,” blockchain security firm Peckshield said in a tweet Monday.
“2 of them have already dropped over -99%. Deployer 0xb583 has already created dozens of tokens with a pump & dump scheme,” Peckshield added, referring to the wallet address of the nefarious issuer of these tokens.
In cryptocurrency, honeypots are smart contracts that pretend to leak their funds to an arbitrary user, provided that the user sends additional funds to it.
On the other hand, sales tax refers to the intentional amount of money taken by an illicit smart contract when a related token is sold – usually amounts higher than 50%, meaning a user selling $100 worth of a token receives only $50 worth, with the remaining “taxed” amount going to the developer of that smart contact.
At writing time on Tuesday, there are over 170 ChatGPT-branded tokens issued on decentralized exchanges such as Uniswap and PancakeSwap, data from DEXTools show.
The most popular one has a market capitalization of over $250 million, with over 300 unique holders and $600,000 in liquidity and is issued on Ethereum. A separate BNB Chain-version has $246,000 in liquidity and a market capitalization of $24 million.
Trading volumes on such fake tokens – and scams in some cases – are a glimpse of the crypto punting dream being alive and well.
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