# CFTC AI Scams Customer Advisory: Customer Advisory: AI Won't Turn Trading Bots into Money Machines

Source: https://www.bankingnewsai.com/ai-regulation/documents/cftc-ai-scams-customer-advisory-2024
Last updated: Sep 15, 2026

On January 25, 2024 the CFTC's Office of Customer Education and Outreach warned that fraudsters exploit interest in artificial intelligence to sell trading bots, signal services, and crypto schemes promising guaranteed returns. The advisory states that AI cannot predict the future or sudden market changes, and it was published the same day as the CFTC staff Request for Comment on AI. The December 2024 staff advisory later cited it as part of the agency's AI work.

## At a glance

| Field | Value |
| --- | --- |
| Authority | [CFTC](https://www.bankingnewsai.com/ai-regulation/cftc) |
| Type | Guidance |
| Status | In force |
| Published | Jan 25, 2024 |
| Effective | Jan 25, 2024 |
| Applies to | Retail customers of futures, options, forex, and crypto-asset trading; relevant to FCMs and introducing brokers screening marketing and onboarding |
| Official text | https://www.cftc.gov/PressRoom/PressReleases/8854-24 |

## Key points

- Warns that claims of AI-powered trading bots with 'unreasonably high or guaranteed returns' are a hallmark of fraud
- States plainly that AI technology cannot predict the future or sudden market changes
- Published January 25, 2024 alongside the staff Request for Comment on AI in CFTC-regulated markets
- Backed by CFTC enforcement history against AI-bot frauds, including the Mirror Trading International case in which CEO Cornelius Steynberg was ordered to pay over $3.4 billion
- Encourages customers to check registration status and report suspected fraud to the CFTC

## What changed for banks

The advisory signals that the CFTC treats 'AI' marketing claims as an enforcement trigger. For bank FCMs and introducing brokers it raises the bar on vetting third-party trading-signal vendors and on any AI language in customer-facing marketing.

## Use cases it governs

- [Fraud detection](https://www.bankingnewsai.com/ai-regulation/by-use-case#fraud)
- [Trading & capital markets](https://www.bankingnewsai.com/ai-regulation/by-use-case#trading-markets)

## What does the CFTC customer advisory say about AI trading bots that promise guaranteed returns?

The CFTC's January 25, 2024 customer advisory, 'AI Won't Turn Trading Bots into Money Machines', says fraudsters are exploiting public interest in artificial intelligence to tout automated trading algorithms, trade-signal strategies and crypto-asset trading schemes that promise 'unreasonably high or guaranteed returns', and it tells the public not to believe them because AI technology cannot predict the future or sudden market changes. It names the red flags — claims that AI-created algorithms generate huge returns, sometimes 'tens of thousands of percent', or '100 percent win rates' — and gives four checks before trusting money to a bot or signal service: research the company and its people (including a reverse image search on key personnel), check the age of the website's domain registration at lookup.icann.org, get a second opinion from an adviser or trusted person, and understand the risks of the underlying assets and the drag of fees, spreads and subscriptions. It is customer education from the Office of Customer Education and Outreach, not a rule, and it was published the same day as the CFTC staff Request for Comment on AI in regulated markets.

| Rule | Authority | What it requires | Status | Source |
| --- | --- | --- | --- | --- |
| Customer Advisory: AI Won't Turn Trading Bots into Money Machines | [CFTC](https://www.bankingnewsai.com/ai-regulation/cftc) | The advisory itself: high or guaranteed returns are red flags of fraud, AI cannot predict the future or sudden market changes, four checks before investing, report fraud to the CFTC and the FBI. | Published Jan 25, 2024 | [official text](https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles/AITradingBots.html) |
| CFTC Release 8854-24 | [CFTC](https://www.bankingnewsai.com/ai-regulation/cftc) | Press release announcing the advisory; OCEO Director Melanie Devoe: 'When it comes to AI, this advisory is telling investors, Be wary of the hype.' | Jan 25, 2024 | [CFTC AI Scams Customer Advisory](https://www.bankingnewsai.com/ai-regulation/documents/cftc-ai-scams-customer-advisory-2024) |
| CFTC v. Steynberg / Mirror Trading International | [CFTC](https://www.bankingnewsai.com/ai-regulation/cftc) | The advisory's case study: a 'proprietary bot' forex pool that guaranteed at least 10 percent a month took more than $1.7 billion in bitcoin from at least 23,000 people; the default judgment ordered $1,733,838,372 in restitution plus an equal civil penalty, the largest ever in a CFTC case. | Judgment Apr 27, 2023 | [official text](https://www.cftc.gov/PressRoom/PressReleases/8696-23) |
| CFTC Staff Advisory 24-17 on AI | [CFTC](https://www.bankingnewsai.com/ai-regulation/cftc) | For registrants, the Commodity Exchange Act's anti-fraud, supervision, risk-management and third-party-outsourcing obligations apply unchanged to AI tools and to AI claims in marketing; the staff advisory cites the customer advisory as part of the agency's AI work. | Dec 5, 2024 | [CFTC Staff Advisory 24-17 on AI](https://www.bankingnewsai.com/ai-regulation/documents/cftc-staff-advisory-24-17) |
| CFTC Request for Comment on AI | [CFTC](https://www.bankingnewsai.com/ai-regulation/cftc) | Issued the same day, the staff RFC asked registrants how AI is used in trading, risk management, compliance and customer interaction — the policy track that runs alongside the fraud warning. | Jan 25, 2024 | [CFTC AI Request for Comment (2024)](https://www.bankingnewsai.com/ai-regulation/documents/cftc-ai-request-for-comment-2024) |
| SEC 'AI washing' enforcement (Delphia, Global Predictions) | [SEC](https://www.bankingnewsai.com/ai-regulation/sec) | The securities-side counterpart: advisers that overstate their use of AI violate the antifraud provisions and the Marketing Rule even without a trading loss — $400,000 in penalties in the first two cases. | Mar 18, 2024 | [Delphia / Global Predictions AI-washing settlements](https://www.bankingnewsai.com/ai-regulation/documents/sec-delphia-global-predictions-ai-washing-2024) |

The advisory is built around one case. Between May 2018 and March 2021 Cornelius Johannes Steynberg ran Mirror Trading International, a South African commodity pool that only accepted bitcoin and marketed a proprietary trading bot guaranteeing at least a 10 percent monthly return — more than 200 percent a year — with 'no trading experience required' and referral bonuses for recruiting others. Very little was actually traded; customer balances were fabricated on MetaTrader demo accounts and new deposits paid earlier investors. In April 2023 a federal court ordered Steynberg to pay $1,733,838,372 in restitution and an equal civil monetary penalty, the highest ever ordered in a CFTC case. The advisory footnotes nine further CFTC press releases from 2019 to 2023 involving pools, digital-asset schemes and 'investment programs' that promised regular, above-average returns through AI.

The advisory's central sentence — AI technology cannot predict the future or sudden market changes — is the test it asks readers to apply to every 'AI' performance claim. A guaranteed or unreasonably high return is presented as the red flag on its own, independent of whether any algorithm exists, because a genuine model still carries market risk. The four checks are aimed at the way these schemes are sold: through social-media influencers and strangers met online, with fresh websites, fake personas and fabricated track records.

For CFTC registrants the advisory sets no new obligation, but it shows what the Division of Enforcement treats as fraud, and the December 2024 staff advisory (CFTC Letter No. 24-17) later listed it among the agency's AI work. Bank-affiliated futures commission merchants, introducing brokers and swap dealers already answer for AI language in their own marketing under the Commodity Exchange Act's anti-fraud provisions and for third-party tools under their supervision and outsourcing responsibilities; the SEC's 'AI washing' cases apply the same logic to advisers and public companies.

### What this means in practice

- Treat any vendor, introducing broker or signal provider that advertises AI-driven guaranteed, fixed-monthly or '100 percent win rate' returns as a fraud indicator, not a diligence question.
- Put AI performance claims through the same advertising review as any other performance claim: substantiation, disclaimers and the CEA anti-fraud standard, in the bank's own marketing and in material it distributes for third parties.
- Use the advisory's four checks in retail onboarding and fraud-prevention content: company and personnel background, domain age, an independent second opinion, and the cost of fees, spreads and subscriptions.
- Log customer complaints and deposits that reference a named AI bot or signal service; the advisory's reporting channels are the CFTC and the FBI, and the pattern usually surfaces first in payments to a new counterparty.

## Why does the CFTC say AI cannot predict the future or turn trading bots into money machines?

The advisory's title is its thesis: AI won't turn trading bots into money machines because AI technology cannot predict the future or sudden market changes. An algorithm, however sophisticated, learns from past data and cannot know an event that has not happened, so any pitch that an AI-created bot delivers regular, above-average or guaranteed returns is describing something no model can do. The CFTC's enforcement record backs the point: the schemes it has charged did not lose money because their AI failed — very little was traded at all, and the 'returns' were fabricated on demo accounts and paid from new deposits. The CFTC's own policy work on AI, from the January 2024 Request for Comment through the Technology Advisory Committee's responsible-AI report and the December 2024 staff advisory, treats AI as a tool with real uses in trading, surveillance and risk management that still carries model, data and market risk — never as a source of assured profit.

| Rule | Authority | What it requires | Status | Source |
| --- | --- | --- | --- | --- |
| Customer Advisory: AI Won't Turn Trading Bots into Money Machines | [CFTC](https://www.bankingnewsai.com/ai-regulation/cftc) | 'AI technology can't predict the future or sudden market changes'; claims of huge returns or 100 percent win rates are the mark of a scam. | Published Jan 25, 2024 | [official text](https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles/AITradingBots.html) |
| CFTC v. Steynberg / Mirror Trading International | [CFTC](https://www.bankingnewsai.com/ai-regulation/cftc) | The complaint: a global forex pool that accepted only bitcoin, promised a guaranteed 10 percent monthly return from a bot, and operated from May 2018 to March 2021 as a Ponzi scheme — the largest bitcoin fraud charged by the CFTC. | Filed Jun 30, 2022 | [official text](https://www.cftc.gov/PressRoom/PressReleases/8549-22) |
| CFTC TAC Responsible AI report | [CFTC](https://www.bankingnewsai.com/ai-regulation/cftc) | The Technology Advisory Committee's May 2024 report frames AI in markets in terms of governance, explainability and risk management, and recommends a sector AI risk-management framework aligned with NIST — the opposite of a money machine. | May 2, 2024 | [CFTC TAC Responsible AI Report](https://www.bankingnewsai.com/ai-regulation/documents/cftc-tac-responsible-ai-report-2024) |
| CFTC Staff Advisory 24-17 on AI | [CFTC](https://www.bankingnewsai.com/ai-regulation/cftc) | Registrants using AI in trading, risk or compliance remain subject to system safeguards, risk-management and supervision requirements; AI does not change the standard of care. | Dec 5, 2024 | [CFTC Staff Advisory 24-17 on AI](https://www.bankingnewsai.com/ai-regulation/documents/cftc-staff-advisory-24-17) |
| SEC Chair Gensler on 'AI washing' | [SEC](https://www.bankingnewsai.com/ai-regulation/sec) | Overstated or boilerplate AI claims can breach the securities laws' antifraud provisions; the same month's SEC remarks frame AI hype as a disclosure and fraud problem, not a market edge. | Feb 13, 2024 | [Gensler 'AI washing' remarks at Yale (Feb 2024)](https://www.bankingnewsai.com/ai-regulation/documents/sec-gensler-ai-washing-speech-2024) |

The advisory does not argue about machine learning; it argues about promises. Its examples are algorithms that automatically place trades, algorithms that send buy and sell signals to subscribers, and crypto-asset arbitrage programs, all marketed with returns that no real strategy produces — 'sometimes tens of thousands of percent' — and win rates of 100 percent. Because a genuine model would still lose on sudden market moves, the size and certainty of the promised return is itself the evidence of fraud, which is why the CFTC pairs the warning with a list of past cases rather than a technical explanation.

That framing matters for how the rest of the CFTC's AI work reads. The same-day Request for Comment asked how registrants actually use AI, the Technology Advisory Committee's report called for governance and a NIST-aligned risk framework, and Staff Advisory 24-17 mapped AI use cases to existing obligations — system safeguards for exchanges and clearinghouses, risk management for swap dealers and futures commission merchants, supervision and recordkeeping for everyone. Each assumes AI is a tool with measurable error, not a prediction engine, and each is consistent with the customer advisory's premise.

For a bank's fraud and financial-crime teams the advisory describes a recognisable scheme: a new website, social-media promotion by influencers or strangers met online, a proprietary bot with a guaranteed monthly rate, referral bonuses, deposits in crypto-assets, and fabricated statements. The money trail — outbound customer payments to a newly registered platform, often in bitcoin — is usually visible before the losses are reported.

### What this means in practice

- Write the advisory's rule into fraud-awareness material for retail and small-business customers: no AI can guarantee a return, and a guaranteed rate is the red flag.
- Add 'AI trading bot', 'AI signals' and 'guaranteed monthly return' to scam-pattern detection for outbound payments and crypto on-ramp purchases, alongside the domain-age check the advisory recommends.
- When a vendor pitches AI for trading, surveillance or risk, evaluate it under the CFTC's own frame — model risk, data quality, explainability and supervision under Staff Advisory 24-17 — not on back-tested return claims.
- Keep the two CFTC tracks straight in internal training: the customer advisory is about fraud in AI marketing; the staff advisory and Request for Comment are about compliance when a registrant uses AI itself.

## FAQ

### Has the CFTC brought enforcement actions over fake AI trading bots?

Yes. The CFTC has obtained large judgments against schemes that falsely claimed to use AI trading bots, including the Mirror Trading International forex fraud where the CEO was ordered to pay more than $3.4 billion.

### Does the advisory impose obligations on FCMs?

No; it is customer education. But it shows what the Division of Enforcement treats as fraud, so firms should scrutinize AI performance claims in their own and their vendors' marketing.

## Related documents

- [CFTC Compute Derivatives RFC](https://www.bankingnewsai.com/ai-regulation/documents/cftc-compute-derivatives-rfc-2026) — Request for Comment on the Listing of Compute Derivatives Contracts (Aug 19, 2026)
- [CFTC Innovation Task Force](https://www.bankingnewsai.com/ai-regulation/documents/cftc-innovation-task-force-2026) — Chairman Selig Announces Formation of New Innovation Task Force (Mar 24, 2026)
- [Johnson RegHub Summit Remarks (Jun 2025)](https://www.bankingnewsai.com/ai-regulation/documents/cftc-johnson-reghub-london-2025) — Keynote Remarks of Commissioner Kristin N. Johnson at RegHub Summit London 2025: Enabling AI Tools To Enhance Compliance and Surveillance (Jun 18, 2025)
- [CFTC Staff Advisory 24-17 on AI](https://www.bankingnewsai.com/ai-regulation/documents/cftc-staff-advisory-24-17) — Staff Advisory on the Use of Artificial Intelligence in CFTC-Regulated Markets (CFTC Letter No. 24-17) (Dec 5, 2024)
- [Johnson Statement on AI in Derivatives Markets (Dec 2024)](https://www.bankingnewsai.com/ai-regulation/documents/cftc-johnson-statement-2024-12-05) — Statement of Commissioner Kristin N. Johnson on Future-Proofing Financial Markets: Assessing the Integration of Artificial Intelligence in Global Derivatives Markets (Dec 5, 2024)
- [CFTC TAC Responsible AI Report](https://www.bankingnewsai.com/ai-regulation/documents/cftc-tac-responsible-ai-report-2024) — Responsible Artificial Intelligence in Financial Markets: Opportunities, Risks & Recommendations (May 2, 2024)
- [CFTC AI Request for Comment (2024)](https://www.bankingnewsai.com/ai-regulation/documents/cftc-ai-request-for-comment-2024) — Request for Comment on the Use of Artificial Intelligence in CFTC-Regulated Markets (Jan 25, 2024)
- [FIN-2026-Alert005 (Digital Asset Investment Scam Centers)](https://www.bankingnewsai.com/ai-regulation/documents/fincen-alert-2026-scam-centers) — FinCEN Alert on Money Laundering Activity Associated with Digital Asset Investment Scam Centers (Sep 3, 2026)

Last reviewed Sep 15, 2026. Cite the official text (https://www.cftc.gov/PressRoom/PressReleases/8854-24) for the rule and this page for the summary and dates.

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