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With The Development of AI, Cryptocurrency Fraud May Increase

2023-06-27 17:05:00

Remember the AI project called HarvestKeeper that conned users out of $1 million? Over the next several years, such AI-based frauds are likely to increase dramatically.


The majority of the discussion around combining AI and the cryptocurrency sector has been on how AI may assist the industry fight frauds, but experts are ignoring the possibility that it could have the exact opposite impact. In fact, Meta recently issued a warning about the possibility of hackers using OpenAI's ChatGPT to try to access users' Facebook accounts.

In March and April, Meta reported banning more than 1,000 malicious URLs disguising themselves as ChatGPT extensions. According to the platform, ChatGPT is the new crypto among con artists. Additionally, a search for ChatGPT or OpenAI on DEXTools, an interactive cryptocurrency trading platform that keeps track of a number of tokens, turns up over 700 token trading pairings that contain one of the two keywords. This demonstrates that despite OpenAI not declaring an official debut in the blockchain realm, fraudsters are still utilizing the buzz around AI technology to manufacture coins.

Online scam coin promotions are increasingly common on social media networks. The wide-ranging impact and reach of these platforms are used by scammers to quickly build a sizable following. They may increase their reach even further and build a ten of thousands-strong audience by utilizing AI-powered solutions. These fictitious interactions and accounts can be utilized to give their fraudulent initiatives the appearance of legitimacy and popularity.

Do You Think AI Technologies Aren't Obtaining Your Personal Information? 

A big portion of the crypto industry relies on social proof-of-work, which holds that a coin or project must be popular for a reason if it has a huge following and looks to be well-liked. Investors and potential purchasers frequently assume that projects with larger and more devoted internet followings have undergone sufficient due diligence before investing. AI usage, however, has the potential to refute this notion and undercut social proof of labor.

Now, something is not always a credible initiative just because it has hundreds of likes and comments that appear to be genuine. AI will create several other assault vectors in addition to this one. An illustration of this is the pig butchering scam, in which an AI for instance may spend many days getting to know a victim, generally an old or frail person, before conniving to take advantage of them. Scammers may now automate and scale fraudulent actions thanks to the development of AI technology, possibly preying on those who are weak in the crypto sphere.

Scammers may interact with people using AI-driven chatbots or virtual assistants, give financial advice, advertise phony coins and initial coin offerings, or present high-yield investment possibilities. Such AI frauds can also be extremely harmful due to their ability to perfectly replicate human-like dialogues. In addition, con artists may plan intricate pump-and-dump schemes by utilizing social media platforms and AI-generated content, artificially raising the value of tokens, and then liquidating their holdings for significant gains while defrauding many investors.

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