Caution Urged as AI and Crypto Convergence Leads to New Scam Wave

Kathleen Breitman, co-founder of the Tezos blockchain, is sounding the alarm about a new scam trend in the crypto industry, which cleverly combines the allure of artificial intelligence (AI) with cryptocurrencies.

In a recent commentary for Fortune, Breitman highlighted the growing phenomenon where unscrupulous individuals are trying to capitalize on the buzz surrounding AI and crypto by merging these two distinct technologies to deceive investors.

Identifying Three Key Scam Varieties

Breitman outlines three primary types of AI-related crypto scams currently in circulation:

1. The first type involves crypto tokens purportedly granting access to AI models or services, exploiting the similar terminology of “tokens” used in both AI and crypto. While some AI services may accept cryptocurrencies as payment, Breitman warns that often the connection is tenuous, and entrepreneurs might mislead investors about the true nature of this relationship.
2. The second type revives the 2017 ICO-era mantra that “data is the new oil,” now largely seen as an internet cliché. Scammers in this category often promote tokens, claiming to offer rewards to individuals for contributing personal data to AI training models, supposedly through “data marketplaces.” Breitman debunks this notion, stating that personal data is not a realistically monetizable asset.
3. The third category, Breitman anticipates, will involve tokens that incorporate buzzwords like “AI” or “GPT” (referring to the popular ChatGPT chatbot) in their names, exploiting the current fascination with these technologies.

Questionable Merger of Crypto and AI

Breitman emphasizes that the efforts witnessed to date to integrate AI with crypto are largely nonsensical from the perspective of serious AI developers. She advises caution against being swayed by these “shoehorned” tokens, highlighting the crypto industry’s unfortunate propensity for producing dubious business models aimed at attracting unwary investors.

“This includes rebranding existing crypto businesses in hopes of dumping tokens on retail suckers,” Breitman explained, reminding readers that the true value of cryptocurrencies lies in providing “a censorship-resistant store of value that unites people across borders.”