5 Vital Crypto Habits to Shield Against AI Scams in 2024: Fortify Your Financial Future

AI investing is characterised by the use of sophisticated software and algorithms to analyse market trends, historical data, and risk. Unfortunately, it has become a focal point for scammers seeking to exploit unsuspecting investors. The rapid rise of cryptocurrency trading has also led to a surge in fake trading bots masquerading as legitimate tools. These bots promise significant returns but ultimately pilfer investors’ hard-earned money.

Recent research has uncovered a concerning trend, revealing that one in 12 Britons has fallen victim to the rising wave of AI scams. With technology continually advancing, the prevalence of such scams is expected to surge even further. So, how can you mitigate risks and shield against AI scams? This article will provide valuable insights and tips on practices that every crypto investor and enthusiasts need in an AI-driven world.

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The Rise of AI Scams in Investment Platforms

The California Department of Financial Protection and Innovation (DFPI) stresses the importance of vigilance to shield against AI scams by highlighting the prevalent integration of AI in investment platforms. Fraudsters capitalise on the AI hype to leverage AI for crypto trading and entice investors with promises of unrealistic returns.

In response to this growing threat, the DFPI has issued a warning, cautioning consumers about the existence of these scams. The DFPI wrote, “One common type of investment fraud is where scammers use certain buzzworthy terms to entice investors to hand over their money,” the department explained. “The DFPI has recently noticed an increase in investment scams that claim to use AI to make money for investors. Usually, these types of investment frauds claim that their AI can trade crypto on behalf of investors and generate too-good-to-be-true profits.”

Deepfake Threats and Cloned Voices in AI Scams

As a means to shield against AI scams, the DFPI revealed the subtle use of AI technology to create deepfake videos featuring non-existent individuals. An outstanding example involves a crypto investment endorsed by a YouTube video featuring an AI CEO. In reality, this was a hoax – the individual did not exist; it was a fictitious avatar programmed with AI to recite a scripted message. 

The risks extend to voice cloning, where scammers leverage AI to replicate someone’s voice and use it in phone calls to lure individuals into fraudulent investment opportunities. 

The Autorité des marchés financiers (AMF) has also raised alarms about the surge in investment scams utilising AI technology. It emphasised the need for individuals to shield against AI scams by revealing that scammers can employ deepfakes to make anyone say anything, manipulating individuals into investing in entirely fictitious schemes.

Quick Link: Unveiling the Threat of AI Face Swap App Scams: The Menace of Deepfake Technology in 2023

5 Crypto Habits to Shield Against AI Scams

1. Vigilance Against Scam Platforms

The DFPI outlines crucial steps investors can take to shield against AI scams. First and foremost, it recommends being wary of investment options that claim to handle the complete trading process on behalf of investors. Many of these platforms turn out to be scams, employing deceptive tactics to lure investors into handing over their funds, often in the form of cryptocurrencies. 

Investors are advised to exercise caution, particularly when confronted with platforms that claim to leverage AI to generate returns. Such claims are frequently deceptive, designed to trick investors into parting with their money. The DFPI consistently monitors online platforms, including YouTube, for individuals promoting dubious investment opportunities. 

To shield against AI scams, crypto investors must be cautious of investment opportunities that require recruiting other investors as they often signal potential Ponzi or pyramid schemes. Additionally, investments that promise high returns with minimal risk should be approached with scepticism.

2. Choose Legitimate Trading Bots

For those considering trading bots, the DFPI recommends thorough research and the use of only legitimate software. Potential users are encouraged to read reviews from other users, offering insights into the legitimacy and performance of various trading bots. Checking the bot’s official website is crucial. A legitimate trading bot should have a clear website providing information about its features, pricing, and track record. 

Users should also be able to easily contact the bot’s developers for any inquiries. This is one of the most reliable ways for investors who want to use trading bots to shield against AI scams by falling victim to fake trading bots. 

Additional considerations when evaluating trading bots include transparency in trading strategy, backing by a reputable company with a good track record, and affordability without exorbitant upfront or subscription fees. When in doubt, the DFPI advises erring on the side of caution and avoiding the use of potentially fraudulent trading bots.

You can also read about AI and its use in the finance industry here.

3. Identify Legitimate Cryptocurrency Projects

Legitimate cryptocurrency projects are not primarily focused on generating profits but rather on technological advancements and blockchain development. Genuine projects can help investors shield against AI scams by promoting blockchain functions that use coins or tokens with a specific purpose. Legitimate projects communicate updates about blockchain developments, security measures, and advancements in technology rather than promoting financial gains. 

As an investor, you should exercise caution when updates centre around financial achievements, such as “Millions raised”, and distinguish between professional-looking marketing from legitimate businesses and the sensationalism employed by scammers. 

Since scammers often use celebrity endorsements and invest in appearances, the DFPI emphasises the importance of discernment and thorough research in differentiating between legitimate and fraudulent cryptocurrency projects.

Also Read: Top 5 Ways to Recover Funds From Cryptocurrency Scams

4. Tighten Your Social Media Security

One of the cruellest forms of AI scamming involves criminals replicating the voice of a loved one to extort money. Scammers gather audio samples from social media and use them to create messages that manipulate family members into sending money. 

Nicholas Crouch at Scams.info stressed the need for individuals to protect their social media accounts to shield against AI scams. This proactive move can reduce the attack surface for scammers looking to access voice recordings and details about their wider family. For those with public social media accounts, creating a family “Password” or “Codeword” is recommended to verify identity verbally. 

@channelnewsasia

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♬ original sound – CNA – CNA

Even those with private accounts should keep their passwords confidential and limited to close family members to shield against AI scams. The password should not be predictable based on social media content or related to family names or pets. Crouch suggests keeping a physical note of the password rather than a digital one for enhanced security.

Also Read: Thailand Threatens Facebook Over Crypto Scams and Other Fraudulent Ads

5. Consider Traditional Investments for Crypto Exposure

For individuals who may feel uncomfortable or unsure about dealing with cryptocurrencies directly, considering traditional investments, such as stocks, ETFs, or mutual funds, is recommended. 

The government regulates traditional investments and typically offers increased protection and security for investors. They provide exposure to the growth and innovation of the crypto industry without necessitating an in-depth understanding of the technicalities and risks associated with direct crypto transactions. 

While these traditional investments offer additional protection and a shield against AI scams, investors still need to conduct thorough research and understand the potential pros and cons of traditional options.

Building a Fortified Shield Against AI Scams

Avoiding AI scams requires a multifaceted approach. Vigilance, due diligence, and a comprehensive understanding of legitimate investment practices can act as a shield against AI scams and fortify your financial future. By adopting these vital crypto habits, investors can navigate the intricate web of AI-driven scams and reduce the risks of becoming a victim of fraudulent schemes. In an environment with constant technological advancements, staying informed and implementing robust security measures are essential components of a resilient financial strategy.

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