Fake DeepSeek Tokens Surge Amid AI Hype, Raising Concerns Over Crypto Scams
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Fake DeepSeek token hits $48M market cap amid Chinese AI app hype
A Solana-based token named after the Chinese AI app DeepSeek briefly surged past a $48 million market capitalization on Jan. 27, fueled by $150 million in trading volume, according to Solana token data aggregator Birdeye. Blockchain records show the token was created on Jan. 4, weeks before DeepSeek's app made headlines by topping the US Apple App Store rankings. The token's valuation quickly cooled to $30 million at the time of writing despite efforts by its creators to link it to DeepSeek's official X account and website. Over 22,000 wallets are still holding the token. A second fake token also capitalized on the DeepSeek hype, briefly reaching a $13 million market cap with $28.5 million in trading volume. It has toppled down to $8.6 million since. DeepSeek has denied involvement with any crypto tokens, warning users about potential scams. The AI app's rise has dominated crypto chatter, with analysts suggesting its success contributed to sending Bitcoin below $100,000 for the first time since US President Donald Trump took office. The app's ascent has been viewed as a challenge to US dominance in AI, shaking financial markets. Related: The release of DeepSeek R1 shatters long-held assumptions about AI Meanwhile, President Donald Trump signed an executive order on Jan. 23 aimed at preserving US leadership in AI, calling for systems free of ideological bias or social agendas. Fake tokens and X hacks Ironically, Trump's own Official Trump (TRUMP) memecoin launch on Jan. 20 and the subsequent debut of another token named after the First Lady, Melania Trump, triggered a surge in fraudulent copycats. Security firm Blockaid reported a spike in malicious "Trump"-branded tokens, from an average of 3,300 daily to 6,800 on the memecoin's launch day. Of those, Cointelegraph found 61 tokens launched on Jan. 20 with tradeable liquidity that claimed to be the official TRUMP or MELANIA. These tokens raked in $4.8 in purchase transactions from 12,641 wallets. Renowned crypto detective ZachXBT warned of a rising scam trend where hackers target X accounts to promote fraudulent tokens. He said that scammers are shifting their focus from government and political accounts to celebrity profiles.
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DeepSeek-Themed Crypto Explodes 600% On AI Disruption But Here's Why You Should Be Cautious
Cryptocurrencies themed on the latest artificial intelligence sensation DeepSeek sprang up overnight, running into millions of dollars in market valuation. What happened: A Solana SOL/USD-based token, DeepSeek AI Agent, skyrocketed nearly 600% to a capitalization of $11.98 million in the last 24 hours, according to CoinMarketCap. The coin's volume soared 698% to $31.25 million over the last 24 hours, indicating massive demand among traders. Another Solana-based token, DeepSeek AI, lifted over 50% in the 24 hours to half a million dollars worth of market value. See Also: Elon Musk's DOGE Department Reportedly Eyes Blockchain To Slash Federal Spending -- Justin Sun Says Tron A Good Option Why It Matters: Both of these coins were looking to profit from the hype surrounding China's startup DeepSeek, whose cost-effective and groundbreaking AI model has challenged the dominance of U.S. companies in the evolving realm. However, it should be noted that these tokens are unrelated to DeepSeek, and the firm has yet to make any announcements about its own cryptocurrency. The other point to consider is that the liquidity of these coins is markedly low as they aren't traded on major cryptocurrency exchanges and are currently only available on decentralized exchanges. This makes them susceptible to wild fluctuations. Furthermore, CoinMarketCap released a disclaimer indicating that the coins' circulation supply and market value had not been independently verified, requiring traders to exercise caution before proceeding with such coins. Photo by Igor Faun on Shutterstock Read Next: Trump's World Liberty Financial Crypto Venture Amasses Over $388 Million in Digital Assets $BTCBitcoin$102482.900.38%WatchlistOverview$SOLSolana$236.410.63%Market News and Data brought to you by Benzinga APIs
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Unaffiliated tokens named after the Chinese AI app DeepSeek have seen explosive growth, reaching multi-million dollar market caps. This surge highlights the intersection of AI hype and cryptocurrency speculation, as well as the risks of fraudulent tokens.
DeepSeek AI Hype Sparks Cryptocurrency Frenzy
In a striking demonstration of how artificial intelligence (AI) hype can influence cryptocurrency markets, several tokens named after the Chinese AI app DeepSeek have experienced explosive growth. Despite having no official connection to the AI company, these tokens have attracted significant attention and trading volume, raising concerns about potential scams and market manipulation.
Surge in Fake DeepSeek Tokens
A Solana-based token called "DeepSeek AI Agent" saw its market capitalization skyrocket by nearly 600% in just 24 hours, reaching $11.98 million
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. Another token, simply named "DeepSeek AI," also experienced a 50% increase, achieving a market value of half a million dollars2
. The most notable case was a token that briefly surged past a $48 million market capitalization on January 27, fueled by an astonishing $150 million in trading volume1
.Disconnect from Official DeepSeek App
These cryptocurrency surges coincide with the rising popularity of the actual DeepSeek AI app, which recently topped the US Apple App Store rankings
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. However, DeepSeek has explicitly denied any involvement with these crypto tokens and has warned users about potential scams1
. The creation of these tokens predates the app's rise to prominence, with blockchain records showing that one was created on January 4, weeks before DeepSeek made headlines1
.Market Impact and Investor Caution
The hype surrounding DeepSeek has had far-reaching effects on the crypto market. Some analysts suggest that its success contributed to Bitcoin's price dipping below $100,000 for the first time since Donald Trump's presidency
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. The rapid ascent of these tokens has also attracted a significant number of holders, with over 22,000 wallets still holding one of the fake DeepSeek tokens at the time of reporting1
.Risks and Red Flags
Experts and market observers have pointed out several reasons for caution:
- Lack of official affiliation: These tokens have no connection to the actual DeepSeek company
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. - Low liquidity: The tokens are primarily traded on decentralized exchanges, making them susceptible to wild price fluctuations
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. - Unverified information: CoinMarketCap has issued disclaimers stating that the circulation supply and market value of these tokens have not been independently verified
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.
Broader Context of Crypto Scams
The DeepSeek token phenomenon is part of a larger trend of cryptocurrency scams capitalizing on current events and popular brands. Recently, the launch of official Trump-related tokens led to a surge in fraudulent copycats, with security firm Blockaid reporting a significant increase in malicious "Trump"-branded tokens
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.Regulatory and Industry Response
The proliferation of such tokens underscores the ongoing challenges in regulating the cryptocurrency space. Crypto detective ZachXBT has warned of a rising scam trend where hackers target social media accounts to promote fraudulent tokens, shifting focus from government and political accounts to celebrity profiles
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.As the intersection of AI and cryptocurrency continues to evolve, investors and enthusiasts are urged to exercise extreme caution and conduct thorough research before engaging with new and unverified tokens.
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