Artificial Intelligence

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In a recent advisory, the Commodity Futures Trading Commission’s Office of Customer Education and Outreach (OCEO) has issued a warning to the public regarding the proliferation of Artificial Intelligence (<a href="https://www.cryptopolitan.com/sources-of-crypto-ai-scams-and-solutions/" rel="noopener noreferrer nofollow">AI</a>) scams targeting investors.&nbsp;
The advisory, titled “Customer Advisory: AI Won’t Turn Trading Bots into Money Machines,” sheds light on how these scams exploit the allure of AI technology to deceive investors with false promises of high returns.
<h2 class="wp-block-heading" id="ai-investment-deception">AI investment deception</h2>
As AI continues to become an integral part of daily life, scammers are quick to exploit its potential. They make audacious claims of substantial returns through trading bots, trade signal algorithms, and crypto-asset arbitrage algorithms.&nbsp;
The prevalence of social media platforms and the influence of “influencers” have made it easier for fraudsters to disseminate misinformation and lure unsuspecting investors into their schemes.
Melanie Devoe, the Director of the OCEO, stressed the importance of vigilance among investors, stating, “When it comes to AI, this advisory is telling investors, ‘Be wary of the hype.'” Devoe pointed out that AI has unfortunately become another avenue for bad actors to defraud unsuspecting investors.
The advisory notice aims to help investors recognize and avoid potential scams, emphasizing the critical point that AI technology cannot predict the future. It provides guidance, including the importance of thoroughly researching the background of companies or traders before entrusting funds to trading bots or signal providers.
<h2 class="wp-block-heading" id="ai-ponzi-scheme-exposed">AI Ponzi Scheme Exposed</h2>
The advisory includes a case study that highlights the fraudulent activities of Cornelius Johannes Steynberg, who orchestrated a Ponzi scheme that exploited public interest in AI, resulting in significant losses for investors.&nbsp;
Steynberg’s scheme serves as a cautionary tale, showcasing how scammers manipulate the fascination surrounding AI for their gain.
The Office of OCEO is committed to empowering customers to protect themselves from fraud and violations through the development of effective financial education materials and initiatives. OCEO engages in outreach to retail investors, traders, industry organizations, and the agricultural community, often collaborating with federal and state regulators and consumer protection groups.
Customers and individuals are encouraged to report suspicious activities or information, such as possible violations of commodity trading statutes and regulations, to the Division of Enforcement through whistleblower tips or complaints on the CFTC’s website.
<h2 class="wp-block-heading" id="protecting-your-investments">Protecting your investments</h2>
Investors are urged to exercise caution when considering investments in platforms claiming AI-generated returns. Here are some key steps to protect your investments:
Conduct Thorough Research: Before entrusting funds to any platform or trader claiming AI-driven returns, conduct extensive research. Verify the legitimacy of the company, trader, or platform, and check for any regulatory approvals or licenses.
Seek Second Opinions: Don’t rush into investment decisions based solely on enticing promises. Seek advice from reputable financial experts or consult with trusted financial institutions before making any investments.
Understand the Risks: Every investment carries some level of risk. Make sure you thoroughly understand the risks associated with AI-driven trading strategies and carefully assess whether those risks align with your financial goals and risk tolerance.
Exercise Caution with Social Media Influencers: Be cautious about investment opportunities promoted by social media influencers or online strangers. Scammers often use these platforms to reach a wider audience and lure unsuspecting individuals into fraudulent schemes.

CFTC Alerts to AI Investment Schemes’ Deceptive False Promises

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