The Commodities Futures Trading Commission Warns Investors About Dubious AI-created Trading Algorithms

The Commodities Futures Trading Commission (CFTC) has issued a warning to investors, urging them to exercise caution when it comes to artificial intelligence-created algorithms that promise unrealistic returns on crypto asset investments. The CFTC has identified various AI-created software, such as crypto-asset trading schemes, trade signal strategies, and automated trading algorithms, as tools that scammers are using to target unsuspecting investors.

Risks of AI-created Trading Algorithms

The CFTC's Office of Customer Education and Outreach (OCEO) has expressed concerns over the rising number of cases in which criminals exploit the hype surrounding AI to defraud users. These scammers often spread false information through social media platforms and influencers, who are not bound by the same advertising rules as traditional media or marketing firms.

Steps to Protect Yourself

Given the risks associated with AI-created trading algorithms, the CFTC advises investors to take certain precautions before committing their funds. Firstly, it is essential to conduct thorough background research on the company or individual offering the AI-based investing or trading bot. Additionally, investors should investigate the trading history of the company selling the AI-created algorithms.

Furthermore, seeking a second opinion and understanding the risks involved are crucial steps in protecting oneself from potential scams. While AI can be a powerful tool, it is important to remember that no technology, including AI, can accurately predict the future.

Director's Perspective

Melanie Devoe, the Director of the OCEO, sheds light on the motivation behind issuing this advisory. She emphasizes that investors should be wary of the hype surrounding AI and highlights that bad actors are exploiting AI to defraud unsuspecting individuals.

Devoe states, "When it comes to AI, this advisory is telling investors, 'Be wary of the hype.' Unfortunately, AI has become another avenue for bad actors to defraud unsuspecting investors."

Identifying and Avoiding Scams

In addition to warning investors about investment schemes that promise above-average or guaranteed returns, the CFTC advisory aims to help investors identify and avoid potential scams. It serves as a reminder that no tool or technology, including AI, can accurately predict the future.

What are your thoughts on this story? Let us know in the comments section below.

Frequently Asked Questions

Which is more powerful: sterling silver or 14k gold?

While gold and silver are both strong metals but sterling silver is less expensive than silver because it contains 92% pure Silver rather than 24%.

Sterling silver is also known as fine silver because it is made from a mixture of silver and other metals such as copper and zinc.

Gold is usually considered to be extremely strong. It can only be broken apart by extreme pressure. If you drop something on top of a chunk of gold it will shatter into thousands of pieces rather than breaking into two halves.

However, silver doesn't have the same strength as gold. If you dropped an item onto silver sheets, it would likely fold and bend without cracking.

Silver is used in jewelry and coins. Silver's value can fluctuate depending on the supply and demand.

Are precious metal IRAs a smart investment?

Answers will depend on the amount of risk you are willing and able to take in order for your IRA account to lose value. They make sense if you have $10,000 in cash as long as you don't expect them to grow very quickly. These are not the best investments if there is a long-term plan for saving money (like gold) or if you want to invest more in assets that will rise in value over time. They also involve fees which could eat into any gains.

How much should your IRA include precious metals

Protect yourself against inflation by investing in precious metals like gold and silver. It's more than just an investment in retirement. It also prepares you for any economic downturn.

Although silver and gold prices have increased in recent years, they can still be considered safe investments as they don't fluctuate nearly as much as stocks. These materials are in constant demand.

Gold and silver prices are usually stable and predictable. They are most likely to rise when the economy grows and fall during recessions. This makes them great money-savers and long-term investments.

10% of your total portfolio should be invested in precious metals. That percentage could go higher if you want to diversify your portfolio further.

Can I get physical ownership of gold in my IRA

Many ask themselves whether they can physically possess gold in an IRA account. This is a legitimate question since there is no legal way.

But if you carefully examine the law, there's nothing stopping you from owning gold in your IRA.

The problem is that most people don't realize how much money they could save by putting their gold in an IRA instead of keeping it in their own homes.

It is easy to toss gold coins, but it's not easy to place them in an IRA. You'll have to pay twice taxes if you keep your gold in your home. Once for the IRS and once for the state where you live.

However, it is also possible to lose the gold in your home and pay twice tax. So why would anyone want to keep their gold in their home?

You may argue that it is necessary to have the assurance that your gold safe in your home. But to protect yourself against theft, you should consider storing your gold somewhere more secure.

If you are planning to visit frequently, your gold should not be left at home. Theft can easily take your gold when you're not home.

A better option is to store your gold in an insured vault. This will ensure that your gold is protected against fire, flood, earthquake and robbery.

Another benefit to keeping your gold in vaults is that you won’t have to pay any property taxes. Instead, income tax will be charged on any gains made from the sale of your precious metal.

If you prefer not to pay tax on your precious metals, an IRA may be a good option. An IRA will allow you to avoid income tax while earning interest on your gold.

Capital gains tax is not a requirement for gold investments. You can cash out your entire investment anytime you wish.

Because IRAs have federal regulation, it won't be difficult to transfer your gold to another bank if there is a move.

Bottom line: You can have gold in an IRA. Fear of theft is all that holds you back.

What is the best precious-metal to invest?

The investment of gold is high-returning and has high capital appreciation. It can also protect against inflation and other risks. As people become worried about inflation, the value of gold tends rise.

It's a good idea to purchase gold futures. These contracts guarantee that you will receive certain amounts of gold at a given price.

Gold futures are not for everyone. Some people prefer to own physical gold instead.

They can easily trade their gold with others. They can also easily sell it whenever they like.

Some people choose to not pay taxes on gold. To avoid paying taxes on their gold, they purchase it directly from the government.

You will need to visit several post offices to complete this process. You must first convert any existing gold into coins or bars.

You will then need to obtain a stamp for the coins and bars. Then, send them to the US Mint. The US Mint will melt the coins and bars to make new ones.

These bars and coins are stamped with the original stamps. This means they are legal tender.

However, if you purchase gold directly from the US Mint you won't be required to pay any taxes.

Which precious metal would you prefer to invest in?

What are the pros & cons of a Gold IRA?

A gold IRA is an excellent investment vehicle for those who want to diversify their holdings but don't have access to traditional banking services. It allows investors to invest in precious materials such as gold and silver without paying tax on gains until they are withdrawn.

However, if you withdraw money before the due date, you will be subject to ordinary income tax. But because these funds are held outside of the country, there is little chance of them being seized by creditors when you default on your loan.

A gold IRA might be the right choice for you if you enjoy owning gold and don't worry about taxes.

Are gold IRAs a good investment?

The best way to invest in gold is by buying shares in companies that mine for it. These companies can make you money by investing in precious metals and gold.

Two drawbacks exist when you own shares directly.

First, you can lose money by holding onto your stock for too long. Stocks can fall more than their underlying asset (like, gold) when they decline. It could lead to you losing your money, instead of making it.

You may also miss potential profits if the market recovers before you sell. So you may need to be patient and let the market recover before you profit from your gold holdings.

You can still enjoy the benefits of physical gold if your investments are separate from your finances. A gold IRA will help protect your portfolio from inflation and diversify it.

Visit our website to find out more about investing in gold.


  • Silver must be 99.9% pure • (
  • You can only purchase gold bars of at least 99.5% purity. (
  • SEP-IRA”Simplified employee pension” For self-employed people like independent contractors, freelancers, and small-business ownersSame tax rules as traditional IRASEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less4. (
  • Depending on your financial situation, most experts recommend you invest no more than 5% to 10% of your retirement funds in precious metals. (

External Links

How To

How to Buy Gold for Your Gold IRA

The term precious metal refers to gold, silver, palladium and rhodium. It refers only to elements with atomic number 79-110 (excluding helium). These elements are considered valuable because they are rare and beautiful. Gold and silver are the most popular precious metals. Precious Metals are often used for money, jewelry and industrial goods.

Gold prices fluctuate daily because of supply and demande. The demand for precious materials has increased dramatically over the last decade as investors seek to find safe havens in volatile economies. This increased demand has caused prices to rise significantly. However, the increasing cost of production has made some people concerned about investing in precious metals.

Because gold is rare and durable, it makes a good investment. Gold never loses its value, unlike other investments. Gold can be bought and sold without tax. There are two ways that you can invest your gold. You can either purchase gold bars and coins or invest in futures gold contracts.

Physical gold coins and bars provide immediate liquidity. They are easy for you to store and trade. However, they are not very inflation-proof. For protection against rising prices, gold bullion is a good option. Bullion, also known as physical gold and available in different sizes, is physical. Bullion comes in a variety of sizes, including kilo bars and one-ounce pieces. Bullion is typically stored in vaults to protect it from theft and fire.

If you prefer owning shares of gold rather than holding actual gold, you should consider buying gold futures. Futures let investors speculate on the future price of gold. Gold futures allow you to be exposed to its price without owning any physical commodity.

If I wanted to speculate about whether gold's price would rise or fall, I could buy a gold contract. My position will change when the contract expires. It can be either “longer” or “shorter.” If I have a long contract, it means that I believe gold's price will rise. In exchange, I'll give money now and promise to get more when the contract ends. A shorter contract would mean that I believe the gold price will fall. I'm willing now to accept the money in exchange for the promise of making less later.

I will receive the amount of gold in the contract, plus interest, when the contract ends. This gives me exposure to the gold price, but I don't have to own it.

Precious metals can be a great investment because they are very hard to counterfeit. While paper currency can be easily counterfeited simply by printing new notes, precious metals cannot. Precious metals have held their value over the years because of this.


By: Terence Zimwara
Title: The Commodities Futures Trading Commission Warns Investors About Dubious AI-created Trading Algorithms
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Published Date: Sun, 28 Jan 2024 08:30:23 +0000

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