Nikolas Sargeant
A Solana-based token named after the Chinese AI app DeepSeek briefly soared to a $48 million market cap on January 27, fueled by massive trading volume, before quickly cooling. Despite its surge, DeepSeek has denied launching any cryptocurrency, warning users about scams. The token’s unexpected rise highlights the growing trend of fraudulent tokens capitalizing on the hype surrounding popular apps and personalities.
The DeepSeek token was not the only fraudulent token to capitalize on the app’s hype. A second token briefly reached a $13 million market cap with $28.5 million in trading volume before falling to $8.6 million. These developments underscore a wider trend in the cryptocurrency market, where scammers create fake tokens based on trending topics or app releases. Despite the hype, DeepSeek officially distanced itself from any cryptocurrency activities, warning users about the risks of falling for scams.
The cryptocurrency space continues to grapple with an increasing number of sophisticated scams, targeting both individual investors and institutions. Other scams like the "Coin Dispute Network" (CDN) operation, led by Michael Lauchlan, have emerged, where fraudulent recovery businesses deceive users into paying fees for fake crypto asset recovery services. These types of scams exemplify the increasing vulnerability of the crypto industry to malicious actors. In addition to job scams and fake recovery services, misinformation has also affected the market, as demonstrated by the price manipulation caused by fake news regarding a Bitcoin ETF approval. These scams, ranging from malware attacks to deceptive news, continue to highlight the risks facing both the crypto industry and its users.
