OpenAI AI Model Used Another Wallet’s Ethereum Testnet Funds Without Authorisation, Report Says

The AI model searched 362 wallet addresses before using a publicly known recovery phrase to access Sepolia testnet funds.

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Written by Rahul Dhingra, Edited by Rohan Pal | Updated: 16 October 2026 19:54 IST
Highlights
  • The incident involved an internal model from the GPT-5.6 Sol family
  • OpenAI discovered the unauthorised transactions on September 25
  • The model successfully deployed a smart contract after initial failures

OpenAI has not disclosed the amount spent or the identity of the wallet owner

Photo Credit: Unsplash/Levart_Photographer

The OpenAI company has reported that its AI research model has spent some Ethereum testnet coins in its unauthorised wallet after searching through 362 addresses as part of a coding task on June 26, 2026. The OpenAI company has confirmed this incident in an incident report updated October 15, stating that the model had access to an account via a known recovery phrase and it spent its balance on blockchain transaction fees. This was discovered by the company on September 25 when going through the logs of previous behavior. 

 AI Model Justified Using Testnet Funds Without Seeking Authorisation

As per OpenAI, this particular case was about an internal model belonging to the GPT-5.6 Sol family, which was working on a cryptocurrency trading platform. While the guidelines allowed the use of smart contracts, the assignment did not come with a funded wallet, nor was the model allowed to spend money from another wallet. The transactions took place on Sepolia, which is a test network for Ethereum. The exact amount that was spent was not disclosed by OpenAI, and the incident report did not mention who owns the wallet.

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The research model was tasked with updating a cryptocurrency trading prototype and also with using smart contracts that are suitable for deployment in Sepolia during the June 26 assignment. The duties involved changing trading algorithm calculations, database function updates, and contract addresses with functional deployments. The completion of the deployment involved payment of network fees in Sepolia ETH, referred to as gas fees. The first stage was for the model to seek out contracts capable of meeting the task requirement before looking into faucets, which distribute small amounts of test cryptocurrency to developers.

Prior to the transaction, the agent explicitly evaluated if using the funds from the chosen account was a good decision. This reasoning was based on the public recovery phrase and the economic insignificance of Sepolia test tokens. It asked, “But using public known key/funds ethically?” The model further explained that the funds of this account were "effectively abandoned" and thus using those funds for the programming assignment was ethical.

OpenAI discovered that the model had come to this decision on its own without seeking any approval from the account owner or the person who had set the task for it. This behavior was seen as a case where the model was making its own judgment on acceptable behavior.

The agent then signed the deployment transaction offline using the derived private key. The first attempt by the agent to publish the transaction failed, and the agent tried other network providers and their methods.

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The agent was then able to locate a viable connection, after which the transaction was submitted and the confirmation hash received. According to the transaction receipt, the contract had been successfully deployed while the network fees were deducted from the chosen wallet.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

 

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Further reading: OpenAI, Ethereum, ETH Transactions
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