Expert Reveals How Scammers Exploit Trading Bots

Fraudsters are developing fake tokens with hidden backdoors to attack AI trading bots engaged in sniping. Kan Li from CertiK discussed this in an interview with Decrypt.

This trading software monitors on-chain activity to identify new coins and purchases assets within seconds of liquidity appearing. Profits are derived from the subsequent price increase.

The expert noted that AI bots are “not stupid” and are programmed to analyze security threats. However, this does not prevent scammers from successfully employing the “bait and switch” method.

Malefactors promote a new coin within the trading community and after several purchases execute a rug pull.

According to the expert, fraud targeting automated software is reaching “massive proportions” and threatens losses in the “tens of millions of dollars.” Scammers are not deterred by legal consequences and “simply continue to kill” bots, taking advantage of the lack of major victims.

“Neither law enforcement nor regulators, nor anyone else cares,” said Li.

Earlier, analysts at Merkle Science examined the main tactics used by scammers and extortionists in the crypto industry in 2024.