Scammers exploit AI and cryptocurrency in emerging fraud schemes Kansas warns

TOPEKA, Kan. (WIBW) – The Office of Kansas Securities Commissioner, a division of the Kansas Insurance Department, has issued a warning to Kansans about the rise of fraudulent investment schemes that blend artificial intelligence (AI) and cryptocurrency. While these scams may promise enticing returns, they exhibit classic signs of fraudulent activity.

Kansas Insurance Commissioner Vicki Schmidt emphasized the need for caution when considering investments related to AI and cryptocurrencies. She stated, “New technology can often bring with it new scams. While the potential exists for AI algorithms to create positive returns on an investment, Kansans should do their own research before investing in any AI or cryptocurrency-related offering.”

The scam’s structure

The fraudulent schemes in question typically involve scammers enticing investors with the opportunity to purchase AI algorithms designed for cryptocurrency trading, promising abnormally high returns. What sets these scams apart is their inclusion of multi-level marketing tactics, offering additional returns for every new investor recruited.

In some instances, these schemes even introduce a secondary investment avenue known as an Initial Coin Offering (ICO). These ICOs promise similar tokens as the interest payment source, or higher returns if investors choose to invest in both the AI trading algorithm and the ICO.

The Office of Kansas Securities Commissioner has outlined several red flags that should raise suspicions among potential investors:

Unsolicited Social Media Messages: Beware of unsolicited messages on social media platforms that promise high returns for minimal investments in cryptocurrency or AI-based trading platforms.

TikTok and YouTube Advertisements: Exercise caution when encountering advertisements on platforms like TikTok and YouTube, especially if they promise extra cryptocurrency or additional percentages on investments by using the link of the video creator.

Overly Easy Withdrawal Processes: Claims of an effortless withdrawal process and guarantees of perpetual availability of investor funds on the platform should be approached with skepticism.

Limited-Time Offers: Be wary of offers that present themselves as limited-time opportunities, as they may be tactics to pressure individuals into hasty decisions.

Simultaneous AI and ICO Offerings: If a website offers both AI cryptocurrency trading algorithms and ICOs, it could be a sign of a fraudulent operation.

Protecting your investments

To safeguard their investments from such scams, potential investors are encouraged to follow these guidelines:

Thorough Research: Always conduct comprehensive research into any investment opportunity, especially those related to AI and cryptocurrency. Verify the legitimacy of the offering and the individuals involved.

Avoid Pressure: Resist the urge to make hasty decisions based on limited-time offers or high-pressure tactics. Legitimate investments should allow you time to make an informed choice.

Independent Verification: Seek independent verification and advice from trusted financial experts or advisors before committing funds to any investment.

Due Diligence: Examine the investment platform’s track record, regulatory compliance, and user reviews to assess its credibility.

Report Suspicious Activity: If you encounter a potentially fraudulent investment scheme, report it to the relevant authorities immediately to prevent others from falling victim.