Crypto Scammers Evolve: Targeting AI Trading Bots

Crypto scammers are evolving their tactics, shifting their focus from exploiting human traders to targeting automated trading bots, according to blockchain security firm CertiK. In the wake of the LIBRA meme coin scandal, where insiders benefited from advance knowledge of launch mechanics, CertiK's chief security officer, Kang Li, revealed how scammers are now designing smart contracts to specifically target AI trading bots.

Speaking at the Consensus conference in Hong Kong, Li explained that these sophisticated scammers are creating fake tokens with hidden "backdoors" that appear safe to AI-powered trading bots. These bots, while not entirely naive, are programmed to detect security risks and analyze tokens for clear rug-proofing functions. However, scammers have turned this into a bait-and-switch scheme, promoting their tokens within AI trading communities and rug-pulling them once a few trades have been made.

The scale of these scams is massive, potentially causing losses in the tens of millions of dollars. Scammers exploit the lack of a single big victim and the absence of significant legal consequences. "Law enforcement and regulation, nobody cares about that," Li said. While technical solutions exist to prevent sniping, implementing them without introducing new security vulnerabilities is challenging. Developers must ensure strict controls over who can trade and how transactions are executed to prevent exploitation by sniping bots.