CFTC warns about AI scams promising huge returns using crypto arbitrage algorithms

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.

"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.

"Don’t believe the scammers. AI technology can't predict the future or sudden market changes," the agency said. 

Bitcoin worth billions lost

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.