Key takeaways:
- The U.S. Commodity Futures Trading Commission warns over crypto-AI Scams on the Rise
- CFTC cites case cases that led to the loss of 30,000 BTC, equivalent to approximately $1.7 billion at the time.
The U.S. Commodity Futures Trading Commission (CFTC) has issued a customer advisory alerting individuals to the increasing prevalence of cryptocurrency scams leveraging Artificial Intelligence (AI).
In their press release titled “Customer Advisory: AI Won’t Turn Trading Bots into Money Machines,” the CFTC underscores the deceptive tactics employed by fraudsters who exploit AI technology to lure investors with false promises of significant financial gains.
The advisory draws attention to the escalating use of AI in everyday life and how scammers capitalize on this trend by making exaggerated claims about generating profits through AI-powered trading bots, signal algorithms, and crypto-asset arbitrage algorithms.
These fraudulent schemes often gain traction on social media platforms, facilitated by influencers who either unknowingly or intentionally spread misinformation.
This exploitation of AI’s mystique has made it easier for scammers to target investors, particularly those with limited knowledge of AI technology.
The CFTC, through its Office of Customer Education and Outreach (OCEO), emphasizes the misuse of AI technology by these fraudsters, who deceive investors with false promises, ultimately leading to financial losses.
The CFTC disclosed that it has identified several fraudulent schemes referencing AI, one of which resulted in the loss of 30,000 bitcoins valued at approximately $1.7 billion at the time.
Furthermore, the CFTC advises investors to exercise caution and thoroughly verify the credentials of any individual or firm offering investment opportunities. It encourages seeking guidance from financial professionals when needed to avoid falling victim to these deceptive schemes.
To address the escalating threat of AI-driven scams, the CFTC is collaborating with other regulatory bodies, law enforcement agencies, and industry stakeholders to bolster surveillance and enforcement measures within the cryptocurrency space.
The objective is to identify and prosecute individuals involved in fraudulent activities, thereby safeguarding investors from falling prey to these deceptive practices.
Melanie Devoe, head of the CFTC’s Office of Customer Education and Outreach, expressed concern about the proliferation of AI-related scams, emphasizing the need for investors to exercise caution and avoid succumbing to unrealistic promises.
She remarked, “Unfortunately, AI has become another avenue for bad actors to defraud unsuspecting investors.”
In conclusion, the CFTC urges investors to approach AI-related investment opportunities with skepticism and to invest their money wisely, steering clear of unreasonable promises.
