Bitcoin

In a recent consumer alert, the Commodity Futures Trading Commission (CFTC) warned about the proliferation of scams leveraging artificial intelligence (AI) to lure unsuspecting individuals into fraudulent crypto investment schemes.&nbsp; 
Specifically, these scams exploit the growing interest in cryptocurrency <a href="https://bitcoinist.com/binance-cz-grapple-with-massive-2-7-billion-fine/" target="_blank" rel="noopener ">arbitrage trading</a> by making “audacious claims” of generating outsized profits through AI-powered algorithms. 
<h2 id="ai-driven-crypto-investment-scams-exposed">AI-Driven Crypto Investment Scams Exposed</h2> 
According to the CFTC’s <a href="https://www.cftc.gov/PressRoom/PressReleases/8854-24" target="_blank" rel="noopener nofollow">press release</a>, these actors peddle the notion that AI-created algorithms can deliver “astronomical returns”, often ranging in the tens of thousands of percent, or boast a 100 percent success rate. These claims encompass various algorithms, including automated trading bots and signal providers. 
According to the <a href="https://bitcoinist.com/cftc-lawsuit-debiex-over-2-3-million-romance-scam/" target="_blank" rel="noopener ">CFTC</a>, the regulator has taken legal action against several defendants over the years who defrauded customers by marketing commodity pools, crypto assets, or investment programs that falsely promised consistent, above-average returns through the utilization of AI.&nbsp; 
Instead of the promised automatic money-making machines, customers faced substantial financial losses, with some cases resulting in the disappearance of significant amounts of funds, including nearly 30,000 <a href="https://bitcoinist.com/us-cftc-chair-affirms-crypto-assets-as-commodities/" target="_blank" rel="noopener ">Bitcoin</a> (BTC) valued at approximately $1.7 billion at the time. The regulator’s warning further reads: 
<blockquote>
 Fraudsters are exploiting public interest in artificial intelligence (AI) to tout automated trading algorithms, trade signal strategies, and crypto-asset trading schemes that promise unreasonably high or guaranteed returns. Don’t believe the scammers. AI technology can’t predict the future or sudden market changes.
</blockquote> 
<h2 id="cftc-urges-caution">CFTC Urges Caution</h2> 
In light of these increased threats, the CFTC urges individuals to exercise <a href="https://bitcoinist.com/cftcs-landmark-year-crypto-cases-account-for-2023/" target="_blank" rel="noopener ">caution </a>and emphasizes the importance of skepticism, especially when encountering AI-related investment opportunities promoted by social media influencers or unknown individuals online.&nbsp; 
As the allure of AI and the cryptocurrency market continues to attract investors, individuals need to remain vigilant and stay informed about potential <a href="https://bitcoinist.com/binance-files-motion-to-dismiss-cftc-lawsuit/" target="_blank" rel="noopener ">risks</a>. The CFTC’s press release concluded: 
<blockquote>
 Before you trust your money to trading platforms that claim AI-created algorithms can generate huge returns, you should: Research the background of the company or trader; conduct a reverse image search on key personnel to verify their identities. Research the history of the trading website by checking the age of the domain registration at lookup.icann.org. Get a second opinion. Talk the investment over with a financial advisor, trusted friend, or family member. Know the risks associated with the underlying assets. Also, consider the impact fees, spreads, and subscription costs would have on returns.
</blockquote> 
<img loading="lazy" decoding="async" class="size-large" src="https://www.tradingview.com/x/M6MZjqzm/" alt="Crypto" width="1814" height="858"> 
The cryptocurrency market has experienced a notable recovery, bouncing back from significant price retracements. As a result, the total market capitalization of cryptocurrencies has witnessed a 4% increase over the past 24 hours, now valued at $1.57 trillion. 
As the leading digital currency, Bitcoin continues to hold a commanding position in the market. With a staggering market cap of $822 billion, Bitcoin accounts for 52.52% of the total cryptocurrency market.&nbsp; 
Featured image from Shutterstock, chart from TradingView.com

CFTC Issues Warning On AI-Driven Crypto Scams Exploiting Arbitrage Trading Strategies

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