A Web3 company that claimed to build a ChatGPT-style AI system on the blockchain has been exposed as a scam. BlockGPT, which raised $256,000 in pre-sale funds, has vanished with the money and its website and Twitter account are inaccessible.

The scam was confirmed by blockchain security firms CertiK and PeckShield, which found that the funds were deposited into Tornado Cash, a privacy tool.

The scam also involved a paid press release that was published on Bloomberg without a clear disclaimer or indication that it was not news. The press release, which was originally delivered via Globenewswire, was auto-scraped into Bloomberg and had very few signs that could have alerted readers.

The press release described two tokens associated with BlockGPT: BGPT, a governance token, and AIBGPT, a token created by BlockGPT AI using Solidity contract. The latter token was reportedly unsellable or honeypot.

Blockfence, a security aggregation provider, criticized Bloomberg for its lack of due diligence and warned its readers to be careful of scam projects.

The BlockGPT scam is one of the many examples of how ChatGPT’s popularity has attracted scammers who use similar names and domains to trick users. According to Unit 42 researchers, there has been a huge increase in registrations and squatting of domains related to ChatGPT between November 2022 and April 2023. They also detected a spike in malicious URLs related to ChatGPT in their Advanced URL Filtering system.

Ref Article: Scam ChatGPT-Style Web3 Firm's Press Release Was Auto-Scraped Into Bloomberg (cryptopotato.com)