The U.S. Commodity Futures Trading Commission (CFTC) recently released a customer advisory warning about crypto scams that use Artificial Intelligence(AI). The advisory aims to raise awareness about fraudsters’ deceptive use of AI technology to make false claims and target potential investors who might suffer financial losses.
AI Scams on the Rise
The CFTC’s press release “Customer Advisory: AI Won’t Turn Trading Bots into Money Machines,” brings attention to the increasing number of cryptocurrency scams that use AI. The scammers exploit the public’s interest in AI, making extravagant claims of generating substantial returns through trading bots and other AI-technology.
To help customers remain cautious, the CFTC has issued advisory warning signs. It encourages investors to ignore strangers promoting claims of high or guaranteed returns online. The agency also highlights the role of social media platforms and “influencers” in spreading false information to promote crypto fraud.
AI Technology Limitations
CFTC strengthens the fact that AI technology cannot predict future changes in crypto or financial markets. Hence, any claims suggesting otherwise are red flags. The CFTC provides four crucial considerations to help investors identify and avoid potential scams.
Case Study: Mirror Trading International
The CFTC has included a notable case study involving Cornelius Johannes Steynberg, who orchestrated a Ponzi scheme, defrauding thousands of individuals out of over $1.7 billion in Bitcoins. Steynberg falsely claimed to use a proprietary bot trading program, guaranteeing significant monthly returns. This case highlights the deceptive nature of crypto scams exploiting AI technology.
Not only Ponzi schemes, but cybercriminals have used AI in several other tactics such as creating deepfakes, hijacking YouTube channels, and executing classic “Double Your Crypto” scams.
In Conclusion
As AI crypto scams are on the rise, now involving Bitcoins in the stock market, the CFTC’s Customer Advisory serves a crucial purpose to educate and remind investors of such potential risks. The CFTC’s Office of Customer Education and Outreach (OCEO) is dedicated to helping customers protect themselves from fraud. The advisory encourages individuals to report suspicious activities or information, promoting transparency and accountability.
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