The relay market powering token resellers and fraud

I spent years working on financial integrity at a large ads company and this isn't novel at all! The same resale markets are at play for the last generation of internet giant's products. Highly sophisticated actors, able to cobble together impressions through abuse of the billing systems, stolen financial instruments, taken over accounts, etc, create massive markets of discounted impressions for resale. It was very interesting to compete against them as we hardened our defenses and they invented new ways to exploit them. I imagine the same defensive tools and techniques are being deployed by my former colleagues who moved to the labs.

One aspect that seems to be missing is the abuse of the free credits provided for new companies by AWS, Azure, and other providers.

I know of a friend's company in India who purchased inference, at 4% of the actual price and states that it gave him an unbeatable competitive edge in their large running video influence pipelines. Any new competitors could not offer their pricing at all.

Primarily that operated because registering a new company getting free AWS credits was a very tiny cost

It's the same fundamental problem as "ticket touting" for popular events - if you sell something that's in demand at a price that's far lower than the clearing price of the market, you're creating a juicy arbitrage opportunity that sooner or later somebody is going to try and exploit

The real problem is subscription models. Businesses want recurring revenue so they try to game the ratio of fixed subscription prices to COGS but it's always a game and so whoever can figure out the upside for the company can figure out the complementary upside for themselves.

How would one even word a bulletproof subscription contract for agentic tokens, anyway? You can't forbid automation because sub-agents are automation. You could forbid "using tokens for the benefit of more than the human who signed up" but then what do families (especially with kids) need to do? What if your friend asks you a question and you turn to a chat model? Forbidding "reselling" tokens outside of a household sounds like the closest terms but that's leaky for anyone who travels a lot, etc.

Fixed cost per token simply works.

This is the problem we've been working on solving with WorkOS Radar. We run it for Cursor and a bunch of other AI companies who have a free trial that gives some free inference to test the product.

It turns out to be a pretty complex program to solve at scale. Token fraud is a lucrative market and the adversaries are surprisingly sophisticated. It's a cat-and-mouse game, accelerated with AI.

https://workos.com/radar

(If you'd like to work on this, we are hiring :))

How do you know the reseller is even giving you the genuine article? Could they be advertising Fable but repacking Deepseek?

the way i see it there are 3 types of resellers. the ones using fake credit cards to rack up costs and then cancel the card are doing actual fraud. then you got mass free trial abuse which is more of a gray area and i would say its still wrong. but if you sign up for a subscription, pay for it and resell your monthly tokens thats not at all unethical, even if its breaking their terms and costing the provider money.

imagine ford starts renting out company cars at a huge discount so they can get people to buy the same model for themselves after they drive it at work. its the exact same car and costs the same amount to make, they just take a loss on it and use by anyone other than employees is banned in the contract.

some small company realizes they dont really use their cars that much so they rent them out again for 3 days a week to get some extra cash. is that fraud? it costs ford nothing because they get the same payments either way, they just lose potential profits. they are the ones who decided to set up a loss leader and take the risk of someone "abusing" the system so we dont need to use public resources to defend their strategy. that wastes taxpayer money to protect corporate profits, and it creates moral hazard because ford (anthropic) is not the one paying for enforcement.

The relays sound also like a nice source of monitoring for whoever controls them.

This is pretty fascinating!

Here are the two open source proxies listed in the article: https://github.com/songquanpeng/one-api and https://github.com/QuantumNous/new-api

> For example, one operator’s price-comparison site listed a package that bought the equivalent of $3,333 worth of official Anthropic credit for 425 RMB — roughly $0.13 of usage per $1 spent.

Do these numbers make sense? $0.13 usage per $1 spent?

Seems to be an LLM megaexpansion of the actual source (in chinese): https://www.v2ex.com/t/1196011

This article is about the mechanics, but the title implies this is unethical. Why is this practice considered unethical?

Nice research and structuring into 4-tier layer. For providers like Anthropic and OpenAI, subscription is the entry point for all these, right? Besides the measures proposed in the article, can token usage % determine these clusters of accounts?

Aren't these figures the wrong way around

"$0.13 of usage per $1 spent"

So I spend a dollar and I get 13 cents worth of usage?

I guess it means the otherway around but I'm not seeing how that phrasing works. Are they paying a premium to access US models?

How do the users know they're getting what they're paying for?

I disabled automatic downgrading/rerouting because it sometimes takes me a second to tell when the answer came from a different model than I wanted. You could easily sell Opus as Fable for a good while.

thats one of the reasons why we vest any of our new customers. We need to know you before you are allowed to use our agent system. When you have an open sign up with some free credits, all hell breaks loose.

I use both of subscription and API services. on last month, i chat with CLI and let it to do something. After that, maybe in one days pass, i received the $32 USD bill. it cause my left my API key and CLI call the API to do job not through subscription.

what tokens are these being sold?

wow. Ai providers can't solve fraud 101 with their oh-so-dangerous-if-released-models?

i think this alone is the biggest bear signal

Token is the new cryptocurrency.

IMHO free trials, subsidized plans and many other practices of AI providers are hostile and harmful to consumers, especially long term.

Perhaps abuse by token resellers is still more than proportional response. Still, I find it hard to sympathize with AI providers.

Perhaps it’s like piracy - when the user can comfortably access legal content, they are less likely to search for alternatives.

"Token reseller market" is a fancy way of saying credit card fraud. If someone stole xboxs from stores using stolen credit cards and then sold them at 10% of their price, at what point is it a "resller market" and not "criminal enterpirse"?

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I don't know anything about tokens. Does the following argument make sense?

1. Tokens are model-specific: e.g. tokens used by Anthropic cannot be used in models of other companies.

2. Tokens are generated by GPU cards. They measure the power of GPU cards.

3. Tokens cannot be separated from the models. You sort of "connect" the software part (models) into the hardware part (GPU cards) to use the tokens generated from the hardware.