AI-blockchain scams are investment frauds that use artificial intelligence (AI) and blockchain technology to lure victims into investing in fraudulent schemes. These scams often target people who are new to AI and blockchain technology, or who are looking for ways to make quick money.
The rise of AI-Blockchain scams is a growing concern for investors and regulators. These scams often use AI and AI narratives to create sophisticated investment opportunities that appear to be legitimate. However, they are often nothing more than Ponzi schemes or other fraudulent schemes designed to steal investors’ money.
A recent example of an AI-blockchain scam occurred in California, where the California Department of Financial Protection and Innovation (DFPI) sent cease and desist letters to five companies allegedly involved in using the AI hype to rip investors off their funds.
One of the companies mentioned, Maxpread Technologies, is said to have created a fake AI-generated image of its CEO and used it for its YouTube video. On the contrary, this image differs from that of Jan Gregory, whom the company confirmed as its CEO.
There are a number of reasons why AI-blockchain scams are on the rise. First, the hype surrounding AI and blockchain makes it easy for scammers to lure investors in with promises of high returns and easy money.
Second, the decentralized nature of blockchain makes it difficult for regulators to track and prosecute scammers. Third, the lack of investor awareness about AI-blockchain scams makes it easy for scammers to target unsuspecting victims.
Types of AI-Blockchain scams
Three basic examples of AI-blockchain scams:
Pyramid schemes are fraudulent investments that promise high returns with little or no risk. However, in order to make money, investors must recruit new investors into the scheme. As the scheme grows, it becomes increasingly difficult to recruit new investors, and eventually, the scheme collapses, leaving investors with nothing.
Scams from the sale of tokens
These include Initial Coin Offerings (ICOs), Initial DEX Offerings (IDOs), and Initial Exchange Offerings (IEOs). Generally, these methods allow crypto companies to raise funds by selling digital tokens. A prime example can be observed in the numerous ChatGPT tokens that entered the crypto market following the buzz around ChatGPT. To see over 400 tokens bearing the same name, simply type “ChatGPT” into DEXTOOLS.
Meanwhile, OpenAI has never created any crypto token for users to invest in.
Fake investment platforms
Scammers often create fake investment platforms that look like legitimate platforms. These platforms may offer high returns or promises of easy money. However, once investors deposit money on these platforms, scammers steal the money and disappear. Btc.imtoker.cn is a typical example.
How to avoid AI-blockchain scams
Here are some tips for avoiding AI blockchain scams:
Know the industry
The first and most important way to avoid these scams is to be educated about what is happening in the industry. Take courses, read valuable and authentic materials, and ask questions about the industry before thinking about investing in it. Investors should educate themselves about AI and blockchain.
Do your research
This is slightly different from the first, as the focus here is for customers to research the investment opportunity before investing. Some of the details to watch out for would include researching the project and team, assessing the project’s whitepaper and technical details, verifying partnerships and endorsements, and reviewing the project’s online presence and community engagement. This will ensure investing in reputable companies. Before investing in any AI-Blockchain project, do your research and make sure you understand the risks involved.
Watch out for unsolicited offers
Due to the interconnectivity in the online space and sometimes the breach of data that has exposed information about people, scammers can reach out to most people with the click of a button.
Through online advertising such as Facebook Ads, Instagram Ads, Google Ads, and other forms of online ads, online users can get unsolicited offers. Investors can also be added to online groups on Telegram, Facebook, and WhatsApp without the user’s consent.
Sift through investments with outrageous offers
Greed is one factor that stimulates the spread of scams. Because people want to make returns as quickly as possible, they become victims of scams. To avoid falling for such schemes, investors should be careful of investments that promise outrageous returns in a short time. This should also be followed with an eye toward investments that bear little to no risk.
Other ways to prevent these scams include applying caution when sharing personal information on any online platform, avoiding clicking on suspicious links that may lead to malicious websites and infect your computer with malware, using secure wallets and exchanges for transactions, participating in reputable communities and forums, and reporting AI-Blockchain scams to authorities.
Protecting yourself from AI-blockchain scams is imperative in today’s investment landscape. These scams exploit the hype surrounding AI and blockchain technology to deceive unsuspecting victims. The rise of these scams poses a significant concern for investors and regulators alike, as they use sophisticated tactics to lure individuals into fraudulent schemes.
The decentralized nature of blockchain makes it challenging for authorities to track and prosecute scammers, although not impossible, while the lack of investor awareness about AI-blockchain scams makes it easier for scammers to target victims. Furthermore, the allure of high returns and easy money entices individuals who are new to AI and blockchain technology or those seeking quick profits.