Polygon and Near Protocol executives championed crypto-driven AI adoption at Cointelegraph’s event while warning about rampant AI token fraud, citing recent $30M scam.
At Cointelegraph’s LONGITUDE summit on 14 July 2024, Polygon co-founder Sandeep Nailwal and Near Protocol’s Illia Polosukhin outlined crypto’s role in accelerating AI adoption through tokenized rewards, even as regulators flag risks from fraudulent projects.
Token Incentives Meet AI Agents
During a 14 July panel discussion in London, Near Protocol’s co-founder Illia Polosukhin revealed a partnership with Fetch.ai to develop decentralized AI agents for automating Web3 transactions. ‘These agents will negotiate DeFi yields and NFT purchases autonomously, funded through crypto micropayments,’ Polosukhin stated, demonstrating a prototype handling cross-chain swaps.
The $30M Cautionary Tale
Polygon’s Sandeep Nailwal immediately countered with cybersecurity concerns, referencing the 10 July collapse of ‘DeepToken AI’ – a fraudulent project that promised AI-powered trading returns before disappearing with $30 million. Blockchain analytics firm Chainalysis confirmed the rug pull involved spoofed GitHub repositories and fake AI developer credentials.
Infrastructure Arms Race
The debate unfolds as Chainlink launched its Cross-Chain Interoperability Protocol (CCIP) on 12 July, enabling AI oracles to verify real-world data across 12 blockchains. Meanwhile, Gartner’s 11 July report predicts AI agents will manage 40% of business interactions by 2026, up from 5% today.
Regulatory Storm Clouds
SEC Chair Gary Gensler issued a 13 July warning about AI-powered trading bots manipulating crypto markets, pledging to ‘bring every tool’ against algorithmically-driven fraud. This follows the SEC’s March 2024 lawsuit against TradeWolf AI for alleged wash trading via machine learning models.
Historical Precedents in Tech Convergence
The current AI-crypto convergence echoes previous technological syntheses that faced early skepticism. The 2017 ICO boom saw numerous ‘AI hedge fund’ token projects collapse, including DeepBrain Chain’s 80% crash post-launch. However, successful integrations like Numerai’s blockchain-based AI prediction market (founded 2015) demonstrate lasting potential when combining cryptographic verification with machine learning.
Mobile Payment Parallels
Just as China’s 2010s mobile payment revolution required both Alipay’s innovation and central bank oversight, today’s AI-crypto projects may need hybrid governance. The People’s Bank of China spent three years (2017-2020) crafting regulations for AI-driven fintech, a process Western regulators now accelerate through initiatives like the EU’s upcoming MiCA II framework targeting algorithmic stablecoins.
