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What’s in today’s cooler:

• Market Monday Update

• Local SDSU Researchers Use AI to Find Crypto Twitter Scams

• SEC Delays Spot Bitcoin ETF Application

• More On Tap News

Researchers at San Diego State University, SDSU, have developed an AI system to identify, track and expose crypto giveaway scams on Twitter.

The AI system called GiveawayScamHunter, was able to identify 95,111 scams on the platform between June 2022 and June 2023. These scams were created from 87,617 accounts on Twitter.

With the AI, the researchers could see the websites, and wallet addresses associated with the scams. From their report, around 365 unique wallet addresses were scammed for up to $872,000.

From their pipeline there are three main stages:

1. Data Collector:

   • Purpose: To gather as many Twitter lists as possible.

   • Method: It uses the Twitter Developer API to continuously download lists from Twitter. Each list is recorded essential details such as, List ID, Title, Description, Creator, Creation Time, and List Members.

2. List Classifier:

   • Purpose: To differentiate between regular Twitter lists and those promoting a free giveaway scam.

   • Method:

     • It employs Natural Language Processing (NLP) techniques to interpret the list title and description.

     • The training process involves manually labeling a sample of lists, translating all text to English, preprocessing the text (removing duplicates, converting emojis to text, replacing slang, etc.), and then using this data to train the model.

     • The classifier’s performance was evaluated using metrics like accuracy, precision, recall, and F1-score. The results showed that the classifier could effectively identify scam lists with high accuracy.

3. Address Extractor:

   • Purpose: After detecting a scam list, the next step is to identify and extract the crypto address that scammers use to collect funds.

   • Method: 

     • URL Recognition: The module first identifies the URL of free giveaway websites mentioned in the list description. It uses URLExtract to recognize and extract URLs from the list description. After extracting the URL, it sends a request to download the webpage.

     • Crypto Address Extraction: Based on the knowledge that each blockchain has its unique address pattern, regular expressions are used to teach for crypto addresses with the downloaded webpage. For instance, Bitcoin addresses usually start with number 1 or 3 or a string “bc1”, while Ethereum addresses typically consist of 40 bytes hex numbers.

By integrating these three modules, GiveawayScamHunter offers a comprehensive and automated approach to detect, analyze, and extract vital information about crypto scams on Twitter lists.

The US Securities and Exchange Commission (SEC) has postponed a decision on Ark Invest’s spot bitcoin ETF application by eight weeks. This delay was anticipated, especially after Ark Invest CEO, Cathie Wood, mentioned her expectation of such a delay in a recent interview. She believes the SEC might approve multiple spot Bitcoin ETF applications at once.

In June, major financial institutions like BlackRock, Fidelity, and Vanguard applied for spot Bitcoin ETFs, with the first response deadline set for early September.

Despite previous rejections due to concerns about investor protection and potential market manipulation, the new applications present fresh market data and surveillance sharing agreements to address these issues. Many experts believe that these applications have a high chance of approval. Mike Novogratz, CEO of Galaxy Digital, mentioned that his sources expect approvals within the next four to six months, though a decision might realistically come by March 2024.

If approved, spot Bitcoin ETFs could usher in a surge of institutional investment in Bitcoin. Many fund managers, currently hesitant due to the lack of a regulated product, might allocate a portion of their portfolios to Bitcoin. This potential influx of investment, combined with other positive market factors, could significantly boost Bitcoin's value in 2024.

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Trump is Holding some Crypto! - Wonder what he thinks and how big his bag is 👀

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Disclaimer: The information shared in this newsletter is for informational purposes only and should not be considered financial advice. It is crucial to conduct independent research and consult with a financial advisor before making any investment decisions.