Cryptocurrency trading, increasingly operated through Artificial Intelligence (AI) bots, has seen a surge in popularity. Yet, recent revelations by cybersecurity professionals have exposed an AI bot created with a sinister purpose: it targets and steals cryptocurrencyprivate keys.

In a disclosure made on April 20 on a social media platform denoted as X, a security researcher who goes by dm557 raised the alarm about a suspicious project hosted on GitHub.

Mechanism of the AI Bot’s Crypto Theft

dm557’s research unveiled that the trading bot’s code includes a file named “checkrug.py,” which harbors an encrypted script capable of decrypting and expropriating users’ private keys. Since private keys are akin to secure digital signatures needed for cryptocurrency transactions, obtaining them can lead to significant financial damage.

Evilcos, the alias of the founder of the esteemed blockchain security firm, SlowMist, confirmed dm557’s claims. He elaborated on the modus operandi of the bot, detailing that it harbors a backdoor mechanism that is triggerable to filch user keys.

Highlighting the potential risks, a security pundit cautioned the community about the hidden dangers within complex software, suggesting malicious intents could be shrouded beneath convoluted code.

“Complex, encoded scripts can often be a red flag signalling malintent, especially for those who aren’t code-savvy. The ethos of cryptocurrency favours clear and open-source code; one would wonder why anyone would complicate things without reason,” Evilcos stated.

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The code containing the backdoor has seemingly been purged by the creator as per latest updates. Despite this, experts have advised extreme caution before downloading such software, which might simply be a strategy to regain trust before reintroducing harmful elements.

“The original developer has deleted the inconspicuous backdoor and is actively revising it. However, should the number of users increase, there’s nothing stopping new backdoors from being implanted at any moment. It’s wise to avoid software with a dubious past,” conveyed Greysign, a crypto developer mentioned.

Worryingly, the creator even went as far as blocking efforts that warn about the project’s original backdoor design.

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In the face of the dynamic and intricate cryptocurrency market, AI bots have become indispensable for traders. The rapidly changing market prices challenge manual trading, hence the turn towards AI bots which efficiently process market information and execute trades with alacrity.