The Rise of the Fake AI Trading Bot Scam
The lure is hard to resist! “Let our AI bot do trading for you – 90% monthly returns with no effort involved!” say the dubious bots’ sites. But if you go under the hood as we did, you will see major warning signs everywhere. In fact, most crypto trading bots that pay influencers to promote them are complete frauds.
The Ponzi scheme caused a loss of one billion dollars.
95% of the “AI bots” being advertised are either scams or useless (SEC warnings).
YouTube & TikTok influencers paid to push these schemes.
How the Scams Work (3 Most Common Tactics)
1. The Demo Account Illusion
Scammers show fake profits on rigged demo dashboards.
Once you deposit real funds, the bot “malfunctions”.
Withdrawals blocked—your money vanishes.
2. The Ponzi Scheme Model
Early users get small payouts (from new victims’ deposits).
When money stops coming in, they cancel the bot and do not operate anymore.
Example: “Something is wrong with our bulls.”
3. The Straight-Up Wallet Drainer
You connect your wallet to “activate” the bot.
A malicious smart contract empties your funds instantly.
Frequently seen on phishing sites like “EthTrade-AI[.]com”.
Red Flags Every Investor Should Know
- No bot can ever make such guaranteed profits in forex.
- Paid Fake Reviews – Bots marketed by influencers with referral links.
- No public records or evidence of any real trading activities.
- “There are only limited slots remaining.”
- Teams and Developers Who Can’t Be Verified on their LinkedIn Page
How to Avoid Getting Scammed
- Always use reputable bots only (3Legit, Hummingbot, Bitsgap).
- Do not link your wallet to suspicious sites.
- Test with small funds first.
- Check Optics Audit Reports (Certik, Hacken).
- Don’t reply to DMs & shady influencers.
The Hard Truth About Trading Bots
Even legit bots rarely beat the market long-term.
Most “winning” backtests are manipulated.
Manual trading still outperforms most automation.
What to Do If You’ve Been Scammed
- File a report on IC3.gov.
- Post warnings on Reddit & Twitter to alert others.
- Never pay “recovery scammers” (They’re lying).
Conclusion
If an AI trading bot sounds too good to be true—it is. Only use trusted exchanges and DYOR (Do Your Own Research), and keep in mind no algorithm has common sense.
