CFTC warns that AI can’t pick your next crypto winner
Investors on the hunt for the next big cryptocurrency profit are being warned not to rely on artificial intelligence (AI) trading bots. Despite its growing popularity, the United States Commodities and Futures Trading Commission (CFTC) reiterates that AI cannot predict the future.
In a recent statement published by the CFTC titled Consumer Advice, the agency warns the public to beware of artificial intelligence scams.
In particular, they use bots, trading algorithms, crypto-asset arbitrage algorithms and other AI-assisted technology to achieve impressive returns.
“The proliferation of social media platforms and ‘influencers' makes it easier for fraudsters to spread false information.”
Melanie DeVoe, director of the CFTC's Office of Consumer Education and Outreach, emphasized that investors should “beware of fraud,” adding that AI has become another way for malicious actors to exploit novice investors.
Meanwhile, the agency said investors should check the company's or trader's track record before trusting their money with trading bots or trading signal providers.
Last year, AI-driven crypto trading bots were a major talking point in the industry.
In April 2023, several US state watchdogs took action against an AI trading bot that leveraged AI to generate up to 2.2% of earnings per day.
Security regulators from Montana, Texas and Alabama have accused crypto trading platform YieldTrust.ai of running a Ponzi scheme because there was no proof that the AI trading bot even existed or could perform at the level the marketing campaign claimed. can
Related: Crypto thieves will deploy more convincing AI scams by 2024
Meanwhile, in June 2023, a case highlighted by blockchain analytics firm Arkham Intelligence revealed that a crypto trading bot took out a $200 million flash loan to make a profit of $3.24.
However, major crypto exchanges like Bitget have been exploring AI bots on their own platforms.
In the year In July 2023, Bitgate CEO Gracie Chen told Cointelegraph that the Commodity Trade Advisor (CTA) AI bot operates by continuously receiving historical strategy data, analyzing and processing the data, thereby realizing self-learning.
Make better choices when you spend less time learning complex marketing channels.
✅ Marketing should be easily accessible to everyone.
Excited to show you #Bitget AI bots!! pic.twitter.com/a82vF2JhnX
— Gracie Chen @Bitget (@GracyBitget) July 27, 2023
“Thus, AI strategies can help users select and create strategies by simply looking for a simple return number and price chart, avoiding the need to fill in complex parameters such as algorithms,” she said.
Meanwhile, earlier this year, Cointelegraph asked ChatGPT if the price of Bitcoin (BTC) could reach $100,000 this year and how AI could play into this outcome.
ChatGPT explained that AI can play a role in market analysis, marketing strategies and blockchain's impact on broader technological developments.
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