Artificial intelligence (AI) has been widely discussed in relation to its potential integration with the cryptocurrency industry, particularly regarding how it can help combat scams.
However, experts are overlooking the fact that AI itself could have the opposite effect. Meta, for instance, recently warned that hackers were exploiting OpenAI’s ChatGPT to gain unauthorized access to users’ Facebook accounts.
In just March and April alone, Meta reported blocking over 1,000 malicious links disguised as ChatGPT extensions.
The platform even labeled ChatGPT as “the new crypto” in the eyes of scammers. Furthermore, a search for keywords like “ChatGPT” or “OpenAI” on DEXTools, an interactive crypto trading platform, reveals more than 700 token trading pairs mentioning these terms.
This indicates that scammers are leveraging the hype around AI tools to create tokens, despite OpenAI not officially entering the blockchain world.
Social media platforms have become popular avenues for promoting fraudulent cryptocurrencies online. Scammers exploit the extensive reach and influence of these platforms to quickly amass a significant following.
By utilizing AI-powered tools, they can further amplify their reach and create an apparently loyal fanbase consisting of thousands of people.
These fake accounts and interactions create an illusion of credibility and popularity for their scam projects.
Much of the cryptocurrency industry relies on social proof-of-work, assuming that popular projects with large followings are legitimate and trustworthy.
Investors and newcomers tend to trust projects with substantial and loyal online followings, assuming that others have done thorough research before investing.
However, AI poses a challenge to this assumption and undermines social proof-of-work.
Merely having thousands of likes and genuine-looking comments does not guarantee the legitimacy of a project. AI opens up various attack vectors, including “pig butchering” scams where AI instances spend days befriending vulnerable individuals, only to scam them later.
The advancement of AI technology has empowered scammers to automate and scale fraudulent activities, potentially targeting vulnerable individuals in the crypto space.
Scammers may deploy AI-driven chatbots or virtual assistants to engage with individuals, offer investment advice, promote fake tokens and initial coin offerings, or present high-yield investment opportunities.
These AI scams are particularly dangerous because they can flawlessly mimic human-like conversations. Furthermore, by leveraging social media platforms and AI-generated content, scammers orchestrate elaborate pump-and-dump schemes, artificially inflating token values before selling off their holdings for significant profits, leaving many investors at a loss.
Investors have long been cautioned about deepfake crypto scams, which utilize AI to create realistic online content by swapping faces in videos and photos or altering audio to make it seem as if influencers or well-known personalities are endorsing scam projects.
One notable deepfake that impacted the crypto industry was a video of former FTX CEO Sam Bankman-Fried directing users to a malicious website promising to double their crypto.
Earlier this year, in March 2023, an AI project called Harvest Keeper scammed users out of approximately $1 million. Around the same time, projects emerged on Twitter claiming to be “CryptoGPT.”
However, on a positive note, AI also has the potential to automate mundane aspects of crypto development, serving as a valuable tool for blockchain experts.
AI technology simplifies essential project requirements such as setting up Solidity environments or generating base code.
This will significantly lower the entry barrier, shifting the focus of the crypto industry from development skills to the genuine utility of ideas.
In some cases, AI can democratize processes traditionally accessible only to a select group, such as well-trained senior developers.
With advanced development tools and launchpads available to everyone in the crypto space, possibilities become limitless.
However, as AI makes it easier for scammers to operate, users must exercise caution and due diligence before investing in a project. It is essential to watch out.
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