Surge in Crypto Scams with Advancements in AI. Here’s What You Need to Know.

There is a growing worry that as technology evolves, scammers will use artificial intelligence (AI) to come up with new ways of defrauding and tricking people.

One of the primary ways in which scammers use AI is through social media platforms. AI-powered tools enable them to increase their reach and create a seemingly loyal fanbase consisting of thousands of people.

Fake accounts and interactions can be used to make their scam projects appear more credible and popular.

Scammers may even use AI-driven chatbots or virtual assistants to engage with individuals, provide investment advice, promote fake tokens and initial coin offerings, or offer high-yield investment opportunities.

The use of AI can challenge social proof-of-work, which assumes that crypto projects with greater and more loyal followings online must be legitimate.

With AI making it easier for projects to scam people, users must be cautious and do their research before investing in a project.

One example of how scammers use AI is through the use of “pig butchering” scams. AI instances can spend several days befriending someone, usually an elderly or vulnerable person, only to end up scamming them.

AI Allows Scammers to Automate and Scale Activities

The development of AI technologies has enabled scammers to automate and scale fraudulent activities, potentially targeting vulnerable individuals in the cryptocurrency industry.

In addition, by leveraging social media platforms and AI-generated content, scammers can orchestrate elaborate pump-and-dump schemes, artificially inflating the value of tokens and selling off their holdings for significant profits, leaving numerous investors with losses.

Investors have long been warned to look out for deepfake crypto scams, which use AI technologies to create very realistic online content that swaps faces in videos and photos or even alters audio content to make it seem as if influencers or other well-known personalities are endorsing scam projects.

The Federal Bureau of Investigation has issued a stark warning about the growing threat of “deepfakes” being used in cyber extortion.

Last week, Twitter suspended the account of a popular meme coin-linked AI bot “Explain This Bob” after Elon Musk called it a “scam.”

The automated Twitter account “Explain This Bob” used OpenAI’s latest large multimodal model GPT-4 to comprehend and respond to tweets by those who tagged the account.

While there are some positive uses for AI in the cryptocurrency industry, such as automating boring and monotonous aspects of crypto development, users must remain vigilant and exercise caution when investing in new projects.

“Cybercriminals use AI in crypto scams, creating advanced bots impersonating family members, raising concerns about crypto industry security and promoting a skeptical mindset,” Twitter user GarageID said.

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