CFTC warns investors not to rely entirely on AI trading bots: They cannot predict the future.

The U.S. Commodity Futures Trading Commission (CFTC) has warned cryptocurrency investors through a customer advisory report to beware of being lured by exaggerated claims from AI tools. Before using related trading robots or trading signal strategies, investors should research the background information of service providers or traders.

CFTC Warns Investors Not to Rely Solely on AI

The Commodity Futures Trading Commission (CFTC) issued a recent press release through its Office of Customer Education and Outreach (OCEO), cautioning against the temptation of exaggerated returns promised by various AI trading robots and the risks associated with investing in them.

The report highlights the increasing use of AI in daily life, with scammers taking advantage of public interest in AI by promoting products like AI automated trading robots, AI trading signal strategies, or arbitrage models, claiming unrealistically high returns with the assistance of AI. However, these often come with high risks:

Claims of high or guaranteed returns are red flags for fraud and individuals should disregard strangers promoting such slogans online.

Furthermore, the rapid promotion on social media platforms and by Key Opinion Leaders (KOLs) makes it easier for scammers to spread fraudulent information.

OCEO Director Melanie Devoe emphasizes the importance for investors to be cautious of irrational hype, as AI has become a new way for malicious actors to deceive novice investors.

The report also highlights the infamous Mirror Trading international fraud case, where investors were lured into investment products claiming monthly profits of 10% or annual profits of over 200% using fake AI trading robots, most of which turned out to be Ponzi schemes.

OCEO Director: AI Cannot Predict the Future Either

Melanie Devoe warns investors not to overly rely on third-party AI tools to find their next trading opportunities or investment directions:

No tool or technology, including artificial intelligence, can effectively predict the future or all changes in the market.

She further suggests that before investing funds, investors should verify the safety and risks of a platform or entity through the following methods:

• Research background information of the company or service provider,conduct image searches on key personnel to verify their identities
• Use CFTC's lookup.icann service to enter and search for the registration information of the domain, to thoroughly investigate the trading website
• Discuss investment matters with investment advisors, trusted friends, or family members, and exchange opinions
• Understand the risks associated with cryptocurrency assets, including trading fees, spreads, and potential costs

A few days ago, the CFTC Chairman also expressed concerns about the approval of the Bitcoin spot ETF, emphasizing that the product revolves around conflicts of interest and complete data opacity, while criticizing market participants for establishing the legitimacy of the product through creating demand irrationally.

CFTC Chairman Supports SEC, Market Participants "Creating Demand" Does Not Ensure Compliance of Bitcoin Spot ETF

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In 2023, the use and development of AI reached an unprecedented peak, yet controversies and enforcement actions related to it continue to increase.

The CFTC is also seeking public input on the professional ethics and application of AI technology, discussing many gray areas that still need to be debated.

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