Etymology
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chisel (n.)

"tool with a beveled or sloping cutting edge at one end, used for paring, splitting, gouging, or cutting out," early 14c., from Anglo-French cisel, Old French cisel "chisel," in plural, "scissors, shears" (12c., Modern French ciseau), from Vulgar Latin *cisellum "cutting tool," from Latin caesellum, diminutive of caesus, past participle of caedere "to cut" (from PIE root *kae-id- "to strike"). Related: Chiseled; chiseling.

chisel (v.)

c. 1500, "to break, cut, gouge, etc. with a chisel," from chisel (n.). Slang sense of "to cheat, defraud" is first recorded in 1808 as chizzel; origin and connection to the older word are obscure (but compare slang sense of gouge; perhaps the sense is "to cut close" as in a bargain). Related: Chiseled; chiseling.

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Definitions of chisel
1
chisel (v.)
engage in deceitful behavior; practice trickery or fraud;
Who's chiseling on the side?
Synonyms: cheat
chisel (v.)
deprive somebody of something by deceit;
They chiseled me out of my money
Synonyms: cheat / rip off
chisel (v.)
carve with a chisel;
chisel the marble
2
chisel (n.)
an edge tool with a flat steel blade with a cutting edge;
From wordnet.princeton.edu