CFTC Raises Concerns Over the Use of AI Trading Bots:
- CFTC warns investors about the exaggerated promises of AI trading bots.
- The regulator points out that AI trading bots cannot accurately predict the future of crypto investments.
- Investors are encouraged to exercise caution and verify the backgrounds of platforms offering AI-assisted services.
The Unrealistic Promises of AI Trading Bots
The U.S. Commodity Futures Trading Commission (CFTC) is alerting crypto investors to the risks of relying on AI-powered trading bots to generate profits in the cryptocurrency market.
Despite their increasing popularity, the CFTC reiterates that AI does not have the ability to predict the future of the crypto markets.
In a recent press release, the agency advises investors seeking significant returns in 2024 not to be swayed by exaggerated promises of impressive returns offered by these technologies. The agency also highlights the role of social media platforms and “influencers” in spreading misleading information by malicious actors.
CFTC’s Warning Regarding AI
The CFTC emphasizes the importance for investors to remain vigilant amid the enthusiasm surrounding AI and to carefully verify the backgrounds of companies or traders before entrusting their money to trading bots or signal providers.
In 2023, AI-driven crypto trading bots sparked intense discussions, with some U.S. states taking actions against an AI trading bot promising returns of up to 2.2% per day, without any proof of its existence or ability to achieve such returns.
Furthermore, major cryptocurrency exchange platforms are exploring the use of AI bots, highlighting the potential of these technologies to simplify the creation of trading strategies. However, the CFTC reminds investors that the effectiveness of AI in crypto trading should be approached with caution.
