CFTC issues a warning against AI hype in fear of scammers targeting the public

The Commodity Futures Trading Commission (CFTC), the US regulator overseeing commodities, recently issued a warning to the public against the hype that currently surrounds the AI sector. According to the regulator, the public has been excited about AI enough for many to forget caution and fall victim to AI scams.

CFTC warns against the AI hype

According to CFTC, artificial intelligence hype has given birth to a new wave of scams where fraudsters use AI technology to trick investors into transferring funds and assets into their accounts.

Thanks to the widespread use of social media platforms, as well as mass amounts of bots available online, AI scams have become highly complex and prevalent. This, of course, poses a significant threat to the public, as many of the traders and investors trying to enter the financial sector are brand new, and lacking the knowledge, experience, and awareness of potential risks, they could easily become victims of such scams.

The CFTC argues that the first step in successfully navigating the sector and avoiding scam is awareness, which is why it warned the public to be wary of unverified accounts that might reach out to request funds on social media and other online platforms.

Apart from that, the regulator also advised users to conduct thorough research of any user that they decide to do any sort of business with, especially if that includes transferring funds into a third-party account.

AI became a new avenue for bad actors to target unsuspecting investors

The advancements in AI development have led to situations where artificial intelligence can be used to trick individuals using automated trade algorithms, trade strategies, and crypto trading schemes. Through this, scammers can try to entice investors into believing that the rates might yield high returns.

According to the CFTC’s warning, there have been cases of people losing tens of thousands, sometimes even millions of dollars after falling victim to money-making schemes. The regulator also warned that there were Bitcoin scams that baited users through the use of AI algorithms.

With the public now well aware of Bitcoin’s potential, using AI to provide a convincing scenario is not difficult for a skilled scammer, and those who have come to the trading sector to seek opportunities can easily lose money to such people.

Melanie Devoe, the acting director of the Office of Customer Education and Outreach (OCEO), commented on the matter. She said that, when it comes to AI, this advisory is telling investors to be extremely careful of the hype, as this is what encourages users to give their money to the fraudsters. Unfortunately, however, AI has already become another avenue for bad actors to defraud unsuspecting investors, as is the case with any promising technology.