CFTC-PR-8854-24

CFTC-PR-8854-24Release ID: CFTC-PR-8854-24

Release Date: January 25, 2024

Source Access Date: May 21, 2024

Source URL:

https://www.cftc.gov/PressRoom/PressReleases/8854-24

Categories:

Agency Customer Advisory

Artificial Intelligence Scams

Headline:

CFTC Customer Advisory Cautions the Public to Beware of Artificial Intelligence Scams

CFTC-PR-8854-24 Excerpt:

Washington, D.C. — The Commodity Futures Trading Commission’s Office of Customer Education and Outreach today issued a customer advisory warning the public about Artificial Intelligence (AI) scams. Customer Advisory: AI Won’t Turn Trading Bots into Money Machines explains how the scams use the potential of AI technology to defraud investors with false claims that entice them to hand over their money or other assets to fraudsters who misappropriate the funds and deceive investors.

With the growth of the use of AI in everyday life, scammers are making claims that it can generate huge returns using bots, trade signal algorithms, crypto-asset arbitrage algorithms, and other AI-assisted technology. The prevalence of social media platforms and “influencers” makes it even easier for fraudsters to spread false information. The advisory warns investors that claims of high or guaranteed returns are red flags of fraud and that strangers promoting these claims online should be ignored.

“When it comes to AI, this advisory is telling investors, ‘Be wary of the hype,’” said OCEO Director Melanie Devoe. “Unfortunately, AI has become another avenue for bad actors to defraud unsuspecting investors.”

The advisory helps investors identify and avoid potential scams, including a reminder that AI technology cannot predict the future. It also lists four important items investors may consider, including researching the background of a company or trader, before trusting their money to trading bots or trade-signal providers.

About the Office of Customer Education and Outreach (OCEO)

OCEO is dedicated to helping customers protect themselves from fraud or violations of the Commodity Exchange Act through the research and development of effective financial education materials and initiatives. OCEO engages in outreach and education to retail investors, traders, industry organizations, and the agricultural community. The office also frequently partners with federal and state regulators as well as consumer protection groups. The CFTC’s full repository of customer education materials can be found at: https://www.cftc.gov/LearnAndProtect.

Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading statutes and regulations, to the Division of Enforcement by filing a whistleblower tip or complaint at www.cftc.gov/complaint. Whistleblowers may be eligible to receive between 10 and 30 percent of the monetary sanctions collected in a successful enforcement action. All whistleblower awards come out of the CFTC Customer Protection Fund which is financed through monetary sanctions paid to the CFTC. To learn more about the CFTC’s Whistleblower Program, go to www.whistleblower.gov.

The Customer Advisory: AI Won’t Turn Trading Bots into Money Machines is available in full below and on https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles/AITradingBots.html.

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