CFTC warns about AI scams promising huge returns using crypto arbitrage algorithms
Regulation • January 26, 2024, 12:59PM EST
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Quick Take
- The CFTC said consumers should be careful about scammers promising huge returns using AI.
The Commodity Futures Trading Commission on Thursday issued a consumer alert warning about artificial intelligence-fueled scams, some of which are promising outsized returns by using crypto arbitrage algorithms. "Don’t believe the scammers. AI technology can't predict the future or sudden market changes," the agency said. The CFTC said it has pinned down several fraud schemes involving references to AI. One of them caused the loss of 30,000 bitcoins worth about $1.7 billion at the time. "Unfortunately, AI has become another avenue for bad actors to defraud unsuspecting investors," CFTC Office of Customer Education and Outreach head Melanie Devoe said in the statement. Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures. © 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
"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 agency said in a statement, adding that social media influencers can spread false promises of quick profit.Bitcoin worth billions lost
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Anna is a senior policy reporter at The Block. She has a background in political journalism and covered Russian civil society for a range of news outlets in Moscow, including the award-winning newspaper Novaya Gazeta. Before joining The Block, Anna spent the past five years investigating cryptocurrency policies and adoption around the world at CoinDesk. Anna owns bitcoin and a gift NFT of sentimental value.
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