The
Commodity Futures Trading Commission’s Office of Customer Education and
Outreach has issued a cautionary advisory alerting the public to the
proliferation of Artificial Intelligence (AI) scams targeting investors. The
advisory, titled “Customer Advisory: AI Won’t Turn Trading Bots into Money
Machines,” underscores how these scams leverage the allure of AI
technology to deceive investors with false promises of lucrative returns.
As
AI becomes increasingly integrated into daily life, scammers exploit its
potential, making audacious claims of substantial returns through trading bots,
trade signal algorithms, and crypto-asset arbitrage algorithms. The prevalence
of social media platforms and the influence of “influencers”
facilitate the dissemination of misinformation, making it easier for fraudsters
to lure unsuspecting investors.
Melanie
Devoe, Director of the Office of Customer Education and Outreach, emphasizes
the need for vigilance, stating: “When it comes to AI, this advisory is
telling investors, ‘Be wary of the hype.’” Devoe highlights the
unfortunate reality that AI has become another avenue for bad actors to defraud
unsuspecting investors.
The
advisory aims to help investors recognize and avoid potential scams,
emphasizing that AI technology cannot predict the future. It provides guidance,
including the importance of researching the background of companies or traders
before entrusting funds to trading bots or signal providers.
CFTC Customer Advisory Cautions the Public to Beware of Artificial Intelligence Scams: https://t.co/4SI2hwOPWq
— CFTC (@CFTC) January 25, 2024
Financial
Education Initiatives: Equipping Customers Against Fraud
The
Office of Customer Education and Outreach (OCEO) is committed to empowering
customers to protect themselves from fraud or 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.
The
advisory includes a case study highlighting the fraudulent activities of
Cornelius Johannes Steynberg, who orchestrated a Ponzi scheme that exploited
public interest in AI, resulting in significant losses for investors.
Before
entrusting funds to platforms claiming AI-generated returns, investors are
advised to conduct thorough research, seek second opinions, and understand
associated risks. They are urged to exercise caution, particularly regarding
hype promoted by social media influencers and online strangers.
Social Media Scams: Help Shape
the Fight with Your 2024
Survey Participation
The
Commodity Futures Trading Commission’s Office of Customer Education and
Outreach has issued a cautionary advisory alerting the public to the
proliferation of Artificial Intelligence (AI) scams targeting investors. The
advisory, titled “Customer Advisory: AI Won’t Turn Trading Bots into Money
Machines,” underscores how these scams leverage the allure of AI
technology to deceive investors with false promises of lucrative returns.
As
AI becomes increasingly integrated into daily life, scammers exploit its
potential, making audacious claims of substantial returns through trading bots,
trade signal algorithms, and crypto-asset arbitrage algorithms. The prevalence
of social media platforms and the influence of “influencers”
facilitate the dissemination of misinformation, making it easier for fraudsters
to lure unsuspecting investors.
Melanie
Devoe, Director of the Office of Customer Education and Outreach, emphasizes
the need for vigilance, stating: “When it comes to AI, this advisory is
telling investors, ‘Be wary of the hype.’” Devoe highlights the
unfortunate reality that AI has become another avenue for bad actors to defraud
unsuspecting investors.
The
advisory aims to help investors recognize and avoid potential scams,
emphasizing that AI technology cannot predict the future. It provides guidance,
including the importance of researching the background of companies or traders
before entrusting funds to trading bots or signal providers.
CFTC Customer Advisory Cautions the Public to Beware of Artificial Intelligence Scams: https://t.co/4SI2hwOPWq
— CFTC (@CFTC) January 25, 2024
Financial
Education Initiatives: Equipping Customers Against Fraud
The
Office of Customer Education and Outreach (OCEO) is committed to empowering
customers to protect themselves from fraud or 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.
The
advisory includes a case study highlighting the fraudulent activities of
Cornelius Johannes Steynberg, who orchestrated a Ponzi scheme that exploited
public interest in AI, resulting in significant losses for investors.
Before
entrusting funds to platforms claiming AI-generated returns, investors are
advised to conduct thorough research, seek second opinions, and understand
associated risks. They are urged to exercise caution, particularly regarding
hype promoted by social media influencers and online strangers.
Social Media Scams: Help Shape
the Fight with Your 2024
Survey Participation