Financial scammers are leveraging the buzz around cryptocurrency, increasingly using social media to fake their credentials and using advancements in artificial intelligence to attack would-be investors, according to a new report The North American Securities Administrators Association, an association of U.S. and Canadian regulators.
Investor interest in cryptocurrency got another recent boost from President Donald Trump and his administration, which have signaled a friendlier regulatory environment, including proposing the creation of a “Crypto Strategic Reserve” for the government to hold certain digital assets.
Scammers are also leaning into the moment, offering fake investments to bilk people.
“Fraudsters often exploit the buzz that comes with innovation and technology to take advantage of investors,” a NASAA spokesperson wrote via email. “Combine that with the many ways in which technology and social media link us together, and bad actors find significant opportunities to try and rip off investors.”
This week, the Securities and Exchange Commission moved ahead with a new SEC Crypto Task Force, led by Commissioner Hester Peirce. The task force will hold public roundtables to develop a regulatory framework for cryptocurrency after accusing prior SEC leadership of creating a “hostile environment” for innovation in the sector.
NASAA also highlighted the risks of financial scams spread through popular social media platforms, including Facebook, WhatsApp, X (formerly Twitter), TikTok, Instagram and YouTube.
Regulators warn users to be careful, in particular, of “finfluencers” offering advice and investment opportunities, as they may be falsifying their expertise.
“Investment promoters increasingly are logging on to find investors … and their money,” NASAA wrote.
Regulators are also grappling with another trending area: artificial intelligence.
NASAA said the potential for AI use to harm investors has regulators “worried,” with expectations of an uptick in 2025 of scammers using AI to generate graphics, videos and other content “that create a sense of legitimacy” to potential investors. They are also on guard against the use of deepfake images, videos and voices of celebrities or people “known to the intended victims.”
“The bad actors are creating and selling AI-powered trading bots, selling equity in companies, purportedly developing an AI model or perpetrating account takeover scams,” NASAA wrote. “The technology is used in sophisticated and elaborate attacks such as identity fraud, using existing pictures of people online and website and app spoofing.
According to the NASAA spokesperson, 60% of regulators said scammers are using AI to create fake online profiles, using pictures from existing accounts and fake images to give a sense of legitimacy to the websites and presentations.
Some tactics, however, remain tried and true among scammers.
NASAA noted that many schemes play on people’s emotions, including a rise in relationship and romance scams. In these cases, scammers develop what feels like emotional relationships before soliciting investments and, at times, draining the victim’s bank accounts before disappearing.
NASAA develops the annual list by surveying state and provincial securities regulators in the United States and Canada.