How to protect yourself from AI blockchain scams

by Arthur · May 30, 2023

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AI blockchain scams are investment scams 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 a quick buck.

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 happened 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 money.

One of the aforementioned companies, 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 picture differs from the picture of Jan Gregory, whom the company confirmed as CEO.

There are several reasons why AI blockchain scams are on the rise. First, the hype surrounding AI and blockchain makes it easy for fraudsters to lure investors in with promises of high returns and easy money.

Second, the decentralized nature of the blockchain makes it difficult for regulators to track and prosecute fraudsters. Third, the lack of investor awareness of AI blockchain scams makes it easy for fraudsters to target unsuspecting victims.

Table of Contents

Types of AI-Blockchain Scams

Three basic examples of AI blockchain scams:

Pyramid game

Pyramid schemes are fraudulent investments that promise high returns with little or no risk. But to make money, investors must recruit new investors to the scheme. As the scheme grows, it becomes increasingly difficult to recruit new investors, and eventually the scheme collapses, leaving the investors with nothing.

Fraud from the sale of tokens

These include Initial Coin Offerings (ICOs), Initial DEX Offerings (IDOs) and Initial Exchange Offerings (IEOs). Typically, these methods allow crypto companies to raise money by selling digital tokens. A good example can be observed in the many ChatGPT tokens which in the crypto market following the buzz around ChatGPT. To see over 400 tokens with the same name, simply type “ChatGPT”. DEXTOOLS.

Meanwhile, OpenAI has never created any crypto token for users to invest in.

Fake investment platforms

Fraudsters often create fake investment platforms that look like legitimate platforms. These platforms may offer high returns or promises of easy money. But when investors deposit money on these platforms, fraudsters steal the money and disappear. Btc.imtoker.cn is a typical example.

How to avoid AI blockchain scams

Here are some tips to avoid AI blockchain scams:

Know the industry

The first and most important way to avoid these scams is to be educated about what’s going on in the industry. Take classes, read valuable and authentic material, and ask questions about the industry before you think 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 investigate the investment opportunity before investing. Some of the details to attend to will include researching the project and team, reviewing the project’s whitepaper and technical details, verifying partnerships and endorsements, and reviewing the project’s online presence and community engagement. This will ensure investments in reputable companies. Before investing in any AI-Blockchain project, do your research and make sure you understand the risks involved.

Watch out for unwanted offers

Because of the interconnectedness of the web and sometimes data breaches that have exposed information about people, fraudsters can reach 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 receive unwanted offers. Investors can also be added to online groups on Telegram, Facebook and WhatsApp without the user’s consent.

Sift through investments with scandalous offers

Greed is a factor that stimulates the spread of fraud. Because people want to return as quickly as possible, they become victims of fraud. To avoid falling for such schemes, investors should be wary of investments that promise exorbitant returns in a short period of time. This should also be followed with an eye towards investments that have little or no risk.

Other ways to prevent this scam include being careful when sharing personal information on any online platform, avoiding clicking on suspicious links that may lead to malicious websites and infecting your computer with malware, using secure wallets and exchanges for transactions , participate in recognized communities and forums. , and reporting AI-Blockchain fraud to the authorities.

Conclusion

Protecting yourself from AI blockchain scams is critical in today’s investment landscape. These scams take advantage of the hype around AI and blockchain technology to trick unsuspecting victims. The rise of these scams is a significant concern for investors and regulators alike, as they use sophisticated tactics to lure individuals into fraudulent schemes.

Blockchain’s decentralized nature makes it challenging for authorities to track and prosecute fraudsters, although not impossible, while the lack of investor awareness of AI blockchain scams makes it easier for fraudsters to target victims. Moreover, the lure of high returns and easy money lures individuals new to AI and blockchain technology or those seeking quick profits.