After discovering dozens of tokens claiming to be connected to ChatGPT, an AI-powered chatbot, blockchain security company PeckShield has issued a warning.

In a post from February 20, the company disclosed that at least three “BingChatGPT” tokens seem to be a part of honeypot schemes, which use smart contracts to trick users into transferring Ether, which the attacker then traps and steals.

According to PeckShield, in what is frequently referred to as a “pump and dump” scam or “rug pull,” at least two of the identified tokens have already lost almost 100% of their worth, while a third is at a 65% decline.

A pump-and-dump scheme typically entails the creators orchestrating a campaign of false advertising and hype to entice investors into buying tokens, then covertly offloading their investment in the scheme when values rise.

A pump and dump plan was used to create “dozens of tokens,” according to PeckShield, by at least one of the criminals behind the tokens, “Deployer 0xb583.”

PeckShield did not provide any explanation as to why the scammers chose the name BingChatGPT for their tokens, but it is possible that they were hoping to capitalize on the February 7 news that OpenAI’s ChatGPT technology would be incorporated into Bing and Microsoft’s Edge web browser.

Because of the hype surrounding AI chatbots, the name of the token may be an attempt to deceive victims into believing they are somehow affiliated with Microsoft.

2022 Data by Chainalysis

Nearly 10,000 new tokens released in 2022 had all the on-chain signs of being pump-and-dump schemes, according to a report published on February 16 by blockchain analytics company Chainalysis.

Only 40,521 of the 1.1 million tokens that were launched last year, according to the Blockchain analytics company, had a “impact on the crypto ecosystem,” with at least ten swaps occurring over four straight trading days in the week after their launch.

The company noted that 9,902 tokens, or 24%, saw a price drop in the first week, which may have been a result of pump and dump activity, out of the 40,521 tokens released in 2022 that garnered enough momentum to be worth analyzing.

The firm noted that it specifically looked at 25 tokens and discovered that “they were almost certainly designed for a pump and dump,” with malicious honeypot code that prevents new buyers from selling the token. However, a price drop on its own is not proof of wrongdoing on the part of the token creators.