SEC Issues Urgent Warning on Cryptocurrency Fraud

These fraudsters specifically aim to capitalize on the hype surrounding artificial intelligence (AI) technology to lure potential victims. They may use common enticing words to advertise their fraudulent activities.

Moreover, these bad actors may also rely on advanced AI technology to impersonate their identities. The rapid development of AI has made it much easier for fraudsters to impersonate government agencies as well as prominent individuals (such as Ripple CEO Brad Garlinghouse).

The SEC also warned about fraudsters reaching out to potential victims through social media to establish online relationships and promote fraudulent investment activities. Therefore, users are advised not to make investment decisions based solely on advice found on the internet. Of course, individuals should never share their sensitive financial information with strangers online.

Related: A Major UK Bank Officially Bans Cryptocurrency Transactions

Furthermore, the SEC also cautioned about pump-and-dump schemes related to digital assets. This warning comes amid the increasing popularity of meme coins, with many celebrities jumping on the latest cryptocurrency craze by launching their own tokens.

It is noteworthy that some recently popular coins have been accused of fraud. The SEC specifically mentioned meme coins in its investor warning, stating that promoters often pump the price of a particular coin artificially to take advantage of the hype.