A new crypto scam involving ChatGPT is doing rounds on YouTube targeting Ethereum wallets. This time the scammers are promoting a “slippage bot” powered by the popular generative AI model that promises to help you earn a passive income in crypto.
Not to everyone’s surprise, it is ripping off many people.
The videos pushed as ads on YouTube follow the same script. They open with a person claiming to have created a trading bot powered by ChatGPT that can be used by anyone, even by those without coding knowledge, to earn money.
Before unveiling the Ponzi scheme, the presenter warns viewers about the crypto community having a lot of scammers and why they mustn’t interact with “unfamiliar wallets” and “unknown exchanges”.
How ironic?
Scammers Targeting ETH Wallets With New ChatGPT Bot Videos
Once the warning message is out of the way, the clip goes into a portion where you will be asked to copy a code from the description below that is to be pasted into another website, which will supposedly execute a so-called “front run” on crypto transactions.
You have to connect your crypto wallet, eg. MetaMask, to the website mentioned in the video for the whole thing to work.
The strategy being promoted here is a ‘sandwich attack’, which is a form of market manipulation where an attacker exploits their victim’s high slippage tolerance on decentralized exchanges (DEX). The malicious actor looks out for a large pending transaction on the exchange and places two of their transactions around it: one before and the other one after, basically sandwiching the victim’s transaction.
Often this unethical trading practice is carried out by a bot designed to profit from price differences on DEXs. Traders use insider information to leapfrog big buy orders and capture the upside.
However, that is not what takes place with our supposed GPT-powered “sandwich bot”. Anyone who connects their Metamask wallet to the website and runs the code is simply giving scammers full-on access to their funds.
How Does It Work?
The scammers use a genius trick to cheat users. If one were to look through the code, they are not going to find anything suspicious about it, aside from the promise of free money. What the bad actors have done is hide the real wallet address within the code by splitting it up into pieces.
So when you run the code, you are transferring your crypto to one of many wallets controlled by anonymous scammers.
All the videos promoting the scam stick to the same script, just with minor changes like the amount you will make using their technique. Some thumbnails promise $2,000 to $3,000 per day, while others list the amount in their ETH value or percentages.
However, anyone who follows the instructions is guaranteed to lose their Ethereum. They will make precisely zero dollars while sending all their crypto to the scammers’ wallets.
Scammers are Hiring Actors on Fiverr to Become the Face of the Ponzi Scheme
The people appearing in the videos are unsuspecting victims, who were all hired by the scammers on Fiverr for video and voice-acting gigs. The idea here is clear as day, the group is hiring real people to be the face of their scam without ever revealing their true identities while raking in real money.
The actors are fully unaware that they are part of a widespread scam and have no control over how their content is being used. Many of these videos are unlisted, meaning they don’t appear in regular YouTube or Google search results. Instead, they appear as paid ads or sponsored content that is being promoted through YouTube’s ad program.
Anyone who tries to view other videos on the channel will notice that it is relatively new as it contains just five or six recently created videos that tend to be generic explanations on technical topics like NFTs and smart contracts. This is to make it seem like the person who created the channel is credible and knows what they are talking about when it comes to making money in the crypto market.
Unfortunately, the actors featured on the YouTube channels are helpless in the sense that they have no control over the content that appears. In most cases, these people were hired for a single video but their clips are being used repeatedly by the scammers across several accounts.
Another thing that you will notice is the overwhelmingly positive comments posted below the videos. This is the work of some bot network trying to add a touch of credibility to the scam.
Victims have Lost Hundreds of Thousands of Dollars to the “Sandwich Attack” Scam
Tech news outlet Gizmodo was the first to report on the scam after learning about it a month ago. They were combing consumer complaints filed with the Federal Trade Commission (FTC) that mentioned ChatGPT when they stumbled upon this.
They obtained one complaint filed last December through the Freedom of Information Act (FOIA) in which the victim said they followed the instructions provided in one of the videos word-by-word only to stand losing $2,500 worth of ETH.
Another victim is said to have lost 1 ETH, which equates to about $3,600 at the time of writing.
It is unclear how much money these scammers were making, but according to reports on various crypto forums, the amount being pulled in is supposedly hitting the hundreds or thousands of dollars.
A spokesperson for YouTube said the platform has so far terminated six channels related to the scams after receiving complaints from users. Fiverr has also terminated the accounts that hired the actors.
Multiple other videos are trying to warn people about the scam. However, they haven’t been getting much attention. Some videos claiming to debunk the scam are themselves trying to push their versions of the tactic by promoting a “real bot” that can generate the promised passive income.
Needless to say, you should be wary of any person or video promising a way to make easy money. It is recommended that you first confirm the origin of the content and verify its creator.