BlockGPT, a BNB Chain-based artificial intelligence coin, has disappeared with $256,000, according to a report by blockchain security firm PeckShieldAlert. The project team closed their website and social media accounts and started mixing funds in Tornado Cash.
Rug pull occurred in BlockGPT project
Reports indicate that the project team has seized 816 BNB. About $256,000 worth of investor funds are currently missing.
#PeckShieldAlert Seems like @BlockGPT_BSC rugged ~816 $BNB (~$256K), $BGPT has dropped -52% within the last hour. ~800 $BNB has already been transferred into Tornado Cashhttps://t.co/T3J9IYn0Ul pic.twitter.com/j7ehGbOrtb
— PeckShieldAlert (@PeckShieldAlert) May 30, 2023
Artificial intelligence coin price crashed
Meanwhile, BGPT price dropped more than 50% at one point. The explanation text of the project, whose social media accounts are currently closed, is as follows:
BlockGPT is a web 3.0 AI initiative focused on building a chatbot with a more human touch. To train the BlockGPT model, the development team needs lots of questions and data. The BlockGPT team leverages a management token called BlockGPT (BGPT) to incentivize people who provide helpful questions and data. The integration of blockchain technology enables BlockGPT to operate in a decentralized manner where every action is recorded and provides unlimited potential.
It was marketed with ChatGPT
According to the company, BlockGPT has comparable features to OpenAI’s ChatGPT. It aims to build a decentralized, token-managed chatbot on the blockchain. However, all this is now a thing of the past. According to Coincu’s research, the project’s official Twitter account and website are currently inaccessible.
Meanwhile, the emergence of Pepe Coin in April and staying on trend with returns of over 4,200% in the following weeks has inspired the launch of many new meme tokens. But many of these projects were malicious. In a recent report we cited as Kriptokoin.com, we listed the projects that were found to have rug pull on this date.
What is rug pull?
A rug pull is a type of scam in which a cryptocurrency or NFT developer exaggerates a project to raise investor funds, but it will be abruptly shut down or leave, taking investor assets with them. The expression “pulling the carpet from under someone” means to upset the balance of the person, to struggle.
A rug pull usually begins with the creation of a new cryptocurrency. It is then first published on a decentralized exchange (DEX). It is listed on a cryptocurrency pair from a dominant platform like Ethereum. The scammers then apply an exaggerated advertising campaign that generates excitement in various venues. Social media marketing is used to attract the investor community.
#PeckShieldAlert We have detected a series of #rugpulls involving the creation of ~24 Scam #MEME Tokens within the last 10 days. #SHITMEME, #BENS, #WorldCoin, #MONKEYS, #ERDR, #Magneto, #STARK, #ZAT, #LADYBOY, #USACOIN, #WLD, #POGO, #Miniclip, #PORN, #FROGS, #RNDT, #PSYOP,… pic.twitter.com/KlBX5k9Go6
— PeckShieldAlert (@PeckShieldAlert) May 23, 2023
These scammers often promise returns that are too good to be true. Or they sell memberships to a Ponzi scheme. With sufficient traction, a platform’s reach increases with the token price. When the price reaches its highest level, the core development team then sells the tokens held in the treasury of investor funds.
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