Artificial intelligence (AI) can be a great ally for cryptocurrencies, but it can also be a threat. Some scammers use AI to generate fake names, logos, websites and graphics that look real. Their goal is to trick investors into buying their tokens and then run off with the money or cause their value to plummet.
A recent case is that of NebulaNodes (NEBU), a supposed cryptocurrency that promised rewards for buying nodes on its network. NEBU was worth $40.46 at one point, but the next day it fell to $1.90, a loss of 100%1.
To avoid these traps, there are some tips to follow:
🟥Research the cryptocurrency you want to buy thoroughly. Find information about its team, project, code, community, partners, audits, reviews, and news. Compare and verify information with reliable sources.
🟥Be wary of offers that sound too good to be true, such as sky-high returns, profit guarantees, referral bonuses, etc. These are warning signs that this is a Ponzi scheme or pyramid scam.
Check the cryptocurrency's liquidity, volume, and market depth. These indicators show the activity and demand for the cryptocurrency. If they are very low or non-existent, it means there are few or no transactions and it may be difficult to recover the money.
🟥Use trusted platforms and wallets to buy, sell, store and transfer cryptocurrencies. Avoid unknown, fraudulent or hacked websites that can steal data, passwords or funds. Always verify the website address and domain and the cryptocurrency smart contract.
🟥Be prudent and responsible with the money you invest or use in cryptocurrencies. Do not invest more than you can afford to lose, diversify your portfolio, set limits and goals, and be aware of market fluctuations and relevant news.
Some of the fake AI-created cryptocurrencies that have been detected are: Bitconnect (BCC), OneCoin (ONE), Pincoin (PIN), iFan (IFAN), PlexCoin (PLX), and BitClave (CAT)2345.
By following these tips, you can reduce the risk of falling victim to fake AI-generated cryptocurrencies and protect your assets and security.
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