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BEWARE! AI Crypto Trading Bot Scams

With thousands of opportunities in the cryptocurrency market, no wonder why it has attracted many investors. And while billions of profits have been earned, there are also billions of losses in profit. That loss could increase even more when investors try out new tools or new technology with the thought of earning huge profits.

As the crypto industry adapts to the use of Artificial Intelligence (AI), lots of opportunities and possibilities have opened. In fact, crypto investors are now taking the help of AI trading bots to earn profits. However, scammers are still everywhere and now taking advantage of the “AI hype” by creating AI Trading bot scams.

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Recently, The US Commodity Futures Trading Commission (CFTC) has warned cryptocurrency investors that AI trading bots that offer huge crypto profits are often scams. CFTC stated that crypto investors aiming for huge returns should not fall prey to the huge profit offered by AI trading bots. 

Unfortunately, due to the popularity of social media influencers, the introduction of these AI trading bots has become easy. Because of this, investors need to be cautious of the promotions.

Some AI trading bots would promote fictitious automatic trading systems that are supposed to generate huge profits by algorithmically trading cryptocurrencies. But in reality, there’s no actual trading. The systems will only collect deposits from victims and then go to the scammer’s pocket.

The agency further reminded investors to thoroughly research the background of the company associated with AI trading bots and other AI-supported technologies.

Last year, YieldTrust.ai regulators were accused of operating a Ponzi scheme where a bot took a $200 million flash loan but only secured $3.24 in profit. 

The CFTC advisory guarantees to help investors recognize potential AI crypto scams to avoid further exploitation.

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Sophia Cruz
Financial Writer - Asian & European Desks
Sophia is an experienced writer, reporter and newsdesk member, mostly on the financial sectors. For the past 5 years Sophia has covered a wide variety of topics such as the financial markets, economics, technology, fin-tech and trading. Sophia has been a part of the FX Leaders team since 2017 and works on producing valuable content and information for traders of all levels of experience.
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