BingChatGPT 'pump & dump' tokens emerging by the dozens: Peckshield

Published at: Feb. 21, 2023

Blockchain security firm Peckshield has raised the alarm after finding dozens of tokens purporting to be related to artificial intelligence (AI) powered chatbot ChatGPT.

In a Feb. 20 post, the firm revealed at least three "BingChatGPT" tokens appear to be part of honeypot schemes — a smart contract that tricks a user into sending Ethereum (ETH), which the attacker then traps and retrieves.

According to Peckshield, at least two of the tokens identified have already lost nearly 100% of their value, while a third is at a 65% loss — in what is often referred to as a “pump and dump” scheme or “rug pull.”

A pump-and-dump scheme typically involves the creators orchestrating a campaign of misleading statements and hype to persuade investors into purchasing tokens, then secretly selling their stake in the scheme when prices go up.

At least one of the bad actors behind the tokens, "Deployer 0xb583," is responsible for creating "dozens of tokens with a pump & dump scheme,” said Peckshield.

#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

While PeckShield did not explain why the bad actors are using the name BingChatGPT for their tokens, the scammers could be trying to take advantage of the Feb. 7 announcement that OpenAI's ChatGPT tech is being integrated into Bing and Microsoft's web browser Edge.

The token's name might be an attempt to trick victims into thinking they are somehow related to Microsoft and take advantage of the hype around AI chatbots.

Blockchain analytics firm Chainalysis recently noted in a Feb. 16 report that nearly 10,000 new tokens launched in 2022 had all the on-chain characteristics of being pump-and-dump schemes.

According to the Blockchain analytics firm, 1.1 million tokens were launched last year, but only 40,521 had an "impact on the crypto ecosystem," with at least ten swaps over four consecutive days of trading in the week following their launch.

"Of the 40,521 tokens launched in 2022 that gained sufficient traction to be worth analyzing, 9,902, or 24%, saw a price decline in the first week indicative of possible pump and dump activity," the firm said.

While a price drop on its own is not an indication of wrongdoing on the part of token creators, the firm noted that it examined 25 in particular and found "they were almost certainly designed for a pump and dump," and had malicious honeypot code that prevents new buyers from selling the token.