PeckShield, a company that specializes in blockchain security, has sounded the alarm after discovering hundreds of tokens falsely claiming to be tied to the artificial intelligence (AI)-powered chatbot ChatGPT.

In a February 20 post, the company revealed that at least three “BingChatGPT” tokens appear to be part of cheating scams. A cheat strategy is a kind of smart contract that tricks a user into contributing Ether (ETH), which is later captured and collected by the attacker.

In what is commonly known as a “pump and dump” or “rug pulling” scheme, PeckShield reports that at least two of the identified tokens have already lost nearly 100% of their value, while a third has a loss. of 65%. . This type of scheme involves the purchase of an asset with the intention of selling it quickly at a higher price.

Typically, the organizers of a pump and dump scheme would orchestrate a campaign of misleading claims and exaggerations to lure investors into buying tokens, then quietly sell their share of the scheme as prices rise. This is done in order to make a profit from the scam.

According to PeckShield, at least one of the malicious actors behind the tokens is known as “Deployer 0xb583” and is responsible for the creation of “dozens of tokens using a pump and dump strategy.”

PeckShield did not provide an explanation as to why the malicious actors use the name BingChatGPT for their tokens; however, scammers may be trying to capitalize on the February 7 announcement that OpenAI’s ChatGPT technology will be integrated into Bing and Microsoft’s Edge web browser.

It is possible that the use of the name “Microsoft Token” is an effort to trick victims into thinking they are connected to Microsoft in some way, to capitalize on the buzz surrounding AI chatbots.

Research published on Feb. 16 by blockchain analytics firm Chainalysis indicated that approximately 10,000 new tokens created in 2022 exhibited all the hallmarks of being pump-and-dump chain. This information was recently made public.

According to the Blockchain analytics firm, 1.1 million tokens were released in 2018, but only 40,521 had an “effect on the crypto ecosystem.” This means that there were at least 10 swaps for four consecutive trading days in the week after they were introduced.

The company said that of the 40,521 tokens that were introduced in 2022 and gained enough momentum to be worth investigating, 9,902 or 24 percent had a first-week price drop that suggested likely pump-and-dump behavior.

The company noted that it examined 25 specific tokens and found that they were “almost certainly designed for a pump and dump,” with malicious code preventing new buyers from selling the token. While a price drop by itself is not an indication of wrongdoing by token creators, the company noted that it examined 25 in particular and found that they “were almost certainly designed for a pump and dump.”