Kansans warned of emerging scams that combine AI and cryptocurrency

TOPEKA, Kan. (WIBW) – Kansans have been warned of emerging scams that combine investments in AI and cryptocurrency but still cling to the traditional hallmarks of fraud.

The Office of Kansas Securities Commissioner, a division of the Kansas Insurance Department, has warned investors to be aware of a new scam that involves the purchase of artificial intelligence algorithms to trade cryptocurrencies with the promise of abnormally high returns.

“New technology can often bring with it new scams,” Kansas Insurance Commissioner Vicki Schmidt said. “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 Office noted that the scammers offer investors the chance to invest in AI platforms that automatically trade cryptocurrency. They often include a multi-level marketing element that promises added returns for every additional investor brought on.

In some cases, officials indicated that the schemes will also offer a secondary investment called an initial coin offering. The ICOs offer the same token listed in the ICO as the interest payment source to investors or higher returns if the investor purchases both the AI trading algorithm and the ICO.

The Office said that all these elements are red flags of fraud through promises of incredibly high returns with little effort.

The Office warned Kansans to be on the lookout for the following red flags:

• Unsolicited messages via social media that offer a high return for a small investment in cryptocurrency trading or an AI-based trading platform.
• Advertisements on TikTok and YouTube that offer additional cryptocurrency or additional percentages on an investment for using the video creator’s link to purchase the offering.
• Claims of an easy withdrawal process and a guarantee that investor funds are always available on the platform.
• Advertisement of a limited-time offer.
• Offering both an AI crypto trading algorithm and an ICO on the same website.

Those who would like to make a report of a suspicious investment offering or suspect they have been a victim of securities fraud should contact the Office of the Kansas Securities Commissioner at 785-296-3071.

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