Expert Reveals How Scammers Are Sabotaging Trading Bots

Fraudsters are creating fake tokens with hidden backdoors to launch attacks on trading AI bots that specialize in sniping. This was discussed in an interview with Kan Li from CertiK, featured on Decrypt.

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

The expert noted that AI bots are «not foolish» and are programmed to assess security threats. However, this does not prevent scammers from successfully employing a “bait and switch” tactic.

Criminals promote a new coin within trading communities, and after a few purchases, they execute a rug pull.

According to the expert, fraud targeting automated software has reached «massive proportions» and threatens losses of «tens of millions of dollars.» Scammers are not deterred by potential legal repercussions and «simply continue to take down» bots, exploiting the absence of significant victims.

«Nobody cares about this — not law enforcement, not regulators,» Li stated.

In a related note, analysts from Merkle Science have outlined the key tactics used by scammers and extortionists in the crypto industry throughout 2024.