A wave of
unauthorized cryptocurrency tokens exploiting the name of Chinese AI sensation
DeepSeek has emerged on multiple blockchain networks, with one fraudulent token
briefly reaching a market capitalization of $48 million despite explicit
warnings from the company.
This is
happening as
DeepSeek has triggered significant panic on Wall Street, dragging
cryptocurrencies down as well. Bitcoin (BTC) briefly dropped below $100,000,
while XRP tested monthly lows. Let’s take a closer look at why crypto is going
down.
The primary
impostor token, launched on the Solana blockchain earlier this month, generated
approximately $150 million in trading volume and attracted over 22,000 wallet
holders, according to data from Solana token tracker Birdeye. DeepSeek has
explicitly denied any connection to cryptocurrency projects and warned users
about potential scams.
Fake Token experienced a sharp surge followed by an equally rapid decline. Source: Birdeye
The scam’s
timing coincided with DeepSeek’s
meteoric rise to prominence in the artificial intelligence sector, where
its cost-effective AI model has challenged industry giants. The fraudulent
token’s creators attempted to legitimize their offering by creating false
associations with DeepSeek’s official social media presence and website.
A second
unauthorized DeepSeek
token also gained significant traction, reaching a $13 million market cap with
$28.5 million in trading volume before declining to $8.6 million. These
incidents are part of a broader trend of scammers exploiting popular technology
trends in cryptocurrency markets.
Paul Howard, Wincent
“DeepSeek will accelerate AI development both in the US and
overseas, denying hegemony over AI,” commented Paul Howard, Director at Wincent. “There is little impact for trading, anything an LLM could offer has already been available for a while, and a lower cost base will do little to influence the way institutional players interact with the crypto market, which is at the amplified risk end of the stock market.”
Why Is Crypto Going Down?
Bitcoin’s
price recently dipped below $100,000, reaching an 11-day low, amid a broader
selloff in technology stocks. This downturn was triggered by DeepSeek’s
announcement of more affordable AI models, which intensified competition in the
tech sector and led to significant declines in tech equities.
At the
beginning of this week, Bitcoin dropped to just under $98,000, testing the
50-day exponential moving average. All major altcoins followed suit:…
