News View Non-AMP

CFTC Sounds Alarm as AI Crypto Scams Skyrocket, $1.7B Bitcoin Loss Recorded

Published by
Qadir AK

The U.S. Commodity Futures Trading Commission (CFTC) is raising a red flag on the rising threat of crypto scams exploiting Artificial Intelligence (AI). In a recent advisory titled “Customer Advisory: AI Won’t Turn Trading Bots into Money Machines,” the CFTC sheds light on the deceptive tactics used by fraudsters, aiming to safeguard investors from potential financial losses.

AI Scams on the Rise

The CFTC’s advisory zooms in on the concerning uptick in cryptocurrency scams leveraging the appeal of AI. Fraudsters take advantage of the public’s interest in AI by making bold claims of substantial returns through trading bots, trade signal algorithms, and crypto-asset arbitrage algorithms.

To empower potential victims, the CFTC provides clear warning signs, particularly cautioning against promises of high or guaranteed returns—a classic red flag for potential crypto fraud. The advisory also highlights the influence of social media platforms and “influencers” in spreading misinformation, urging investors to exercise caution when encountering unfamiliar individuals online.

AI’s Limits: A Reality Check

The CFTC emphasizes the reality that AI technology cannot predict future changes in the crypto or financial markets. Any claims suggesting otherwise should be approached with skepticism. In an effort to guide investors through potential scams, the CFTC offers four crucial considerations:

Case Study: Mirror Trading International

The advisory features a case study on Cornelius Johannes Steynberg, who orchestrated a Ponzi scheme, defrauding thousands of individuals of over $1.7 billion in Bitcoins. Steynberg’s false promises of using a proprietary bot trading program for significant monthly returns underscore the deceptive nature of crypto scams exploiting AI technology.

Did You Know? Trump’s Ex-Lawyer Cites Tech Error in Fake AI-Generated Legal Citations

The world of AI-driven crypto scams extends beyond Ponzi schemes. Cybercriminals employ various tactics, including creating deepfakes, hijacking YouTube channels, and executing classic “Double Your Crypto” scams. Bitdefender’s recent Steam-Jacking 2.0 report delves into the sophistication of these tactics, with cybercriminals impersonating prominent brands and figures like XRP, MicroStrategy, Elon Musk, and Binance.

An Urgent Call to Action

As AI-driven crypto scams continue to escalate, infiltrating even the stock market, the CFTC’s Customer Advisory assumes a crucial role in educating and reminding investors of potential risks.

The CFTC’s Office of Customer Education and Outreach (OCEO) stands as a dedicated ally against fraud, engaging in outreach and education initiatives, and collaborating with regulators and consumer protection groups. The advisory encourages individuals to report suspicious activities or information, fostering transparency and accountability.

Stay vigilant, stay informed—let’s outsmart the scammers together!

Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

Recent Posts

Top Meme Coins Set For Major Breakout: PENGU, BONK, FLOKI, DOGE

Meme coins like PENGU, BONK, FLOKI, and DOGE are showing critical technical patterns that could…

July 31, 2025

“End the Fed”: Massie, Trump Turn Up the Heat on Jerome Powell

The fight over U.S. interest rates is heating up. With inflation concerns and economic uncertainty…

July 31, 2025

Top AI Crypto Coins Set for Breakouts: VIRT, RNDR, ASI, NEWT, And TAO

In Brief: The AI crypto sector is leading the market with a +111.82% rise in…

July 31, 2025

Philippines Launches Blockchain Budget System Despite Polygon Outage

The Philippines has taken a major step forward in its digital transformation, launching a new…

July 31, 2025

Grayscale Launches Story Trust for IP Token Exposure

Grayscale has introduced the Grayscale Story Trust, giving investors direct access to the native IP…

July 31, 2025

Top Presale Under $1 as Bitcoin Cash (BCH), Hedera (HBAR) Struggle to Hold Momentum

As the crypto market experiences its usual rotation cycles, one pattern is becoming increasingly evident—investors…

July 31, 2025