The Dark Side of AI in Crypto: How Scammers are Exploiting the Tech

Artificial intelligence, hailed as a revolutionary tool, is now becoming a double-edged sword in the crypto world.

Scammers and bad actors are increasingly harnessing AI’s power to manipulate markets, swindle investors, and undermine the trust that underpins the digital asset space. From deepfakes of prominent figures to the proliferation of fraudulent tokens, AI is rapidly emerging as a potent weapon in the arsenal of crypto criminals.

Reportedly, scammers have already attempted deepfake scams featuring tech mogul Elon Musk, Singapore’s Senior Minister Lee Hsien Loong, and many other celebrities. Crypto analyst Akhbar Kharbekh highlighted that the increasing AI threats could impact investors’ trust in crypto, stating:

“Investors and new buyers tend to trust cryptocurrencies with greater and more loyal followings online, assuming that others have done enough research prior to investing. However, the use of AI can challenge this assumption.”

AI also facilitates the creation of fake tokens and pump-and-dump schemes. In a research paper published by the analytics firm Elliptic, the platform highlighted a multitude of high-risk tokens created through AI scams and unethical moves. By using industry-related keywords like GPT to draw attention to the fake tokens, the scammers inject a false sense of trust among the traders.

In related news, the Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, has warned against AI scams targeting Governor Eli Remolona Jr. While BSP noticed the use of AI to falsely portray that Remolona was promoting Tesler Code, a crypto project, the central bank clarified that the governor does not endorse any such projects.

As the crypto industry grapples with the growing threat of AI-powered scams, regulators, investors, and developers must collaborate to establish robust safeguards and promote transparency. The future of crypto may well depend on our ability to harness the power of AI for good while mitigating its potential for harm.

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