Cryptocurrency Scams in the Wake of the DeepSeek AI Boom: Beware of Fake Projects and High-Risk Investments

Cryptocurrency Scams in the Wake of the DeepSeek AI Boom: Beware of Fake Projects and High-Risk InvestmentsThe rapid advancement of Artificial Intelligence (AI) in recent years has led to a surge in AI applications. DeepSeek, a prominent AI application, has quickly attracted a large user base

Cryptocurrency Scams in the Wake of the DeepSeek AI Boom: Beware of Fake Projects and High-Risk Investments

The rapid advancement of Artificial Intelligence (AI) in recent years has led to a surge in AI applications. DeepSeek, a prominent AI application, has quickly attracted a large user base. However, this popularity has also attracted scammers who are using its name to perpetrate fraudulent activities. The Cyber Security Bureau of the Ministry of Public Security has issued an official warning, urging users to be wary of fake blockchain projects and cryptocurrency scams related to DeepSeek. These cases have resulted in significant financial losses for investors, highlighting the serious risks involved. This is not an isolated incident; the recently popular AI product Manus has also experienced similar problems with counterfeit tokens flooding the market, further emphasizing the severity of the issue.

Su Xiaorui, a senior researcher at Su Xi Zhi Yan, points out that leveraging trending technologies is a common tactic used by perpetrators of these fraudulent blockchain projects and cryptocurrency scams. They attempt to capitalize on the latest market trends, linking the value of their tokens to unrealistic expectations to lure investors, ultimately resulting in substantial financial losses.

The Rampant Activities of Counterfeit DeepSeek Projects

Police reports reveal that scammers have created counterfeit websites nearly identical to the official DeepSeek website. Users searching for the official DeepSeek website are easily misled into these phishing sites. Criminal groups use these websites to launch a blockchain project also named "DeepSeek," claiming it's built on DeepSeek technology and boasts high efficiency and security, attracting investors to participate in crowdfunding. After raising substantial funds, these groups disappear, leaving investors with nothing.

Furthermore, many investors are lured into so-called "official DeepSeek groups." Within these groups, individuals claim to offer "beta access" or "advanced courses" while simultaneously promoting a virtual currency called "DeepSeekCoin," claiming it's backed by the DeepSeek team and possesses strong technological backing and promising prospects, thus inducing investors to purchase it, resulting in financial losses.

A report from Qi An Xin XLab shows that between December 1, 2024, and February 3, 2025, a staggering 2650 websites and phishing sites impersonating DeepSeek were identified. A large-scale registration of counterfeit domains began on January 26, 2025, peaking on January 28, demonstrating the extent of this fraudulent activity.

On the trading platform GMGN, over 30 tokens using the name "DeepSeek" have emerged. One fake DeepSeek token called "Seek" experienced a surge of over 7000% on January 25th. However, just three days after its launch, it plummeted, ultimately becoming nearly worthless, resulting in significant investor losses. A report by BlockAid security company shows that fake DeepSeek token scams on the Ethereum and Solana networks have reached a total of 420 million RMB (approximately $58 million USD).

In response, DeepSeek released a statement on February 6th, clarifying that the company only has official accounts on three social media platforms: WeChat, Xiaohongshu, and its official website and app, which do not contain any advertisements or paid programs. Furthermore, aside from the official DeepSeek user communication group, no other groups have been established in China. Any charges related to purported official DeepSeek groups are fraudulent. DeepSeek officially reiterated that it has never issued any virtual currency and urged users to exercise caution, invest rationally, and avoid financial losses.

Su Xiaorui believes the "DeepSeekCoin" case again demonstrates that cryptocurrency projects relying solely on hype and lacking practical business support are highly likely to pose significant risks to investors. The supposed "decentralization" of cryptocurrency is easily manipulated by scammers, failing to achieve independent operation. She points out that many aspects of the cryptocurrency field, including fund security, investor education and protection, and platform operational planning, still require significant improvement.

Manus and Other AI Products Also Facing "Counterfeit Token" Problems

Besides DeepSeek, the recently popular AI product Manus has also seen over ten tokens bearing its name on the GMGN trading platform. One token launched on March 6th experienced significant volatility within just three days, highlighting its high risk. Manus co-founder and chief scientist, Ji Yichao, issued a statement clarifying that Manus has never been involved in any cryptocurrency projects, token issuance, or blockchain initiatives, and any cryptocurrency enterprises claiming association are fraudulent.

Yu Jianing, principal of Uweb and co-chair of the Blockchain Special Committee of the China Communications Industry Association, stated that the cryptocurrency market indeed suffers from various irregularities. Most "air coin" projects that capitalize on hype are essentially scams or pyramid schemes, with market manipulation frequently occurring, severely disrupting financial order. Furthermore, some crypto assets feature unrealistic promotion and hype, leading to market valuations deviating from fundamental value or being assigned excessively high expectations. Some assets don't genuinely utilize blockchain technology, merely using it as a guise to obtain valuations completely disproportionate to their actual value.

Capitalizing on hype has become commonplace in the cryptocurrency world. At the beginning of 2023, following the popularity of ChatGPT, a large number of fake websites and tokens with the same name emerged. One ChatGPT-named virtual currency, initially priced at $0.000611, saw its price surge over 1800% within five hours, before rapidly retracting 80% and ultimately disappearing.

A report by SlowMist, a blockchain ecological security company, shows that phishing attacks caused approximately $494 million in losses in 2024, a 67% year-on-year increase. While the number of victims only increased by 3.7%, the losses per attack significantly increased, with the largest single theft reaching $55.48 million. Phishing attacks typically involve deploying malicious transactions on phishing websites to steal crypto assets, employing diverse and highly deceptive tactics.

Regulation and Prevention: Collaborative Efforts

It's noteworthy that China maintains a strict regulatory stance on virtual currencies. The People's Bank of China and other departments have repeatedly issued notices on preventing and addressing the risks of virtual currency trading speculation, clarifying that virtual currencies do not have the same legal status as legal tender and that virtual currency-related business activities are illegal financial activities.

Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, believes that the frequent emergence of cryptocurrency projects capitalizing on hype is mainly due to the attractiveness of market trends and investors' desire for high returns. However, these projects often lack practical technological support and market foundations, making project quality unreliable and exposing investors to fraud, market, and legal risks, leading to significant financial and psychological losses. He suggests that the government and relevant departments strengthen regulation of the cryptocurrency market, crack down on false advertising and illegal fundraising, establish a sound regulatory mechanism, and standardize market order. Trading platforms should also strengthen the review of listed projects, ensuring they have practical technological support and market foundations, and establish sound risk assessment mechanisms to provide early warnings and alerts about potential risks. Investors should also increase their risk awareness, enhance their understanding of the cryptocurrency market, conduct thorough research and analysis before investing, and avoid blindly following trends. Any project promising "guaranteed profits" or "extremely high annualized returns" may be fraudulent, and investors should remain rational and cautious about promises of high returns.

Lin Xianping, former deputy secretary-general of the Civil and Commercial Affairs Committee of the China Legal Consulting Center, points out that scammers exploit people's lack of understanding of blockchain and cryptocurrency, attempting to attract attention and funds using new trends. To ensure project quality and safety, investors need to conduct thorough due diligence and professional assessments, avoiding investments in projects lacking transparency or oversight from formal regulatory bodies.

In conclusion, amidst the rapid development of AI technology, vigilance against fake projects and high-risk investments is crucial. Strengthening regulation, raising investor risk awareness, and enhancing industry self-discipline are key to preventing such scams. Only through collective efforts can market order be maintained and the legitimate rights and interests of investors be protected.