BlockGPT Appears Rug Pull With Damage $256,000
- BlockGPT, a new Web3 project that aims to build a ChatGPT-style artificial intelligence system on the blockchain, was found to be rug-pulling users.
- According to the report, 816 BNB has been withdrawn from the platform.
- The previous project’s white paper found many suspicious points when it did not provide enough information.
BlockGPT, a Web3 company, was found to be rug-pulling users, raising concerns with newly launched platforms.
According to PeckShieldAlert’s warning, a rug pull occurred in the BlockGPT project on the BSC chain, and more than 816 BNBs (about $256,000) were lost. So far, 800 BNBs have been transferred to Tornado Cash. The price of BGPT has dropped by about 52% in the past hour.
A rug pull is a kind of fraud in which a cryptocurrency or NFT developer hypes a project in order to gather investor funds, only to abruptly shut down or leave, taking investor assets with them. The phrase “to pull the rug out from under someone” refers to throwing the person off balance and scrambling.
A rug pull often starts with the creation of a new cryptocurrency token, which is then posted on a decentralized market and coupled with a coin from a dominant platform, such as Ethereum. Fraudsters then use social media marketing to lure a community of investors by establishing a buzz-worthy, hype-filled advertising campaign across a variety of venues. These frauds often dangle bogus promises of too-good-to-be-true returns or assign membership in a Ponzi scheme. With enough traction, a platform’s reach grows in tandem with the value of its token. As the price reaches its high, the core development team sells their tokens, which are then in the treasury of investor funds.
BlockGPT, according to the company, seeks to establish a decentralized, token-governed chatbot on the blockchain with features comparable to OpenAI’s ChatGPT. However, all that is now in the past.
Earlier, a white paper on the BlockGPT website claims that the firm is deploying more than six generative pre-trained transformers (GPT) models on the platform, which were trained using a proprietary dataset. The document does not specify the size of the corpus, the number of parameters used to train the model or any other technical specifics for the AI, but it does state that it was expressly created to answer blockchain-related inquiries.
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