On January 25, 2024, the Commodity Futures Trading Commission (CFTC) Office of Customer Education and Outreach put out an advisory regarding artificial intelligence (AI) scams consumers should be aware of.
It talks about how AI technology can be used to defraud investors.
They cite a recent case study “Mirror Trading International” where a scammer Johannes Steynberg of South Africa stole over $1.7 billion in Bitcoin from 23,000 people using websites and social media.
In marketing and promotional material, Steynberg claimed that with $100 in Bitcoin, customers could buy into a commodity pool that used a proprietary trading algorithm (or AI bot), guaranteed to bring a return of at least 10% each month or more. Customers could refer friends and work as an affiliate, and receive bonuses for each person they referred.
The reality is, this acted much more like a Ponzi scheme. Steynberg created fake accounts and balances keeping people misguided, while misappropriating the cash.
The CFTC emphasizes that this example and others that promise unreasonably high yields using algorithms or AI-assisted technologies should be approached with caution. They further remind investors that artificial intelligence cannot predict the future, nor sudden market changes, and that investors should do their diligence, including performing a thorough background check of the company or trader.
Are you a victim of an AI trading scheme?
Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading statutes and regulations to the CFTC by filing a whistleblower tip or complaint at www.cftc.gov/complaint. Whistleblowers may be eligible to receive between 10 and 30 percent of the monetary sanctions collected in a successful enforcement action.
However, to maximize the protential of receiving a reward, filing a complaint is best done with the help of a whistleblower attorney. Those who think they may have a case can file an intake below to request a consultation with one of our attorneys at no charge. We’ll evaluate your case and determine if it meets eligibility requirements and the potential outcomes in a succesfull enforcment action.
