Scams involving cryptocurrency and artificial intelligence are expected to be among the biggest threats to retail investors in 2025, according to the North American Securities Administrators Association.
In a statement published on Thursday, NASAA cited schemes tied to digital assets and cryptocurrencies as primary concerns, as well as the use of social media apps and "tactics designed to play on emotion."
While NASAA's statement was silent on the legitimacy of crypto tokens and digital currencies themselves – something that the new SEC leadership under the Trump administration has been working to support through its crypto task force and its recent guidance on meme coins, among other moves – it highlighted the risks of bad actors touting investments with promises of impossibly stellar returns.
“If something sounds too good to be true, it probably is,” Leslie Van Buskirk, NASAA president and Wisconsin securities administrator, said in the statement Thursday. “Investigate before you invest, and remember, being pressured to act is a huge red flag.”
Based on a survey of state and provincial securities regulators, NASAA said fraudsters are increasingly using social media platforms, messaging apps, and online videos to target investors. The survey found 31.7 percent of likely scams originated on platforms such as Facebook and X, while 31.3 percent were linked to text- and voice-based services like Telegram and WhatsApp.
Short-form video content, including TikTok and Instagram Reels, accounted for 19 percent of scams, while long-form video sites such as YouTube and Vimeo made up 14.1 percent.
NASAA also flagged scammers' accelerating adoption of AI, with state regulators anticipating a rise in AI-generated content used to deceive investors. Nearly 39 percent of regulators expect bad actors to create AI-driven videos, graphics, and other materials to establish false credibility, while 22.2 percent predict an increase in deepfake scams involving impersonated celebrities or trusted individuals.
“The rapid growth of technology and the rise of artificial intelligence gives scam artists new tools to steal your money,” Van Buskirk said. “AI investing is the latest technology to make waves in the investing landscape, and fraudsters are pitching new investments that often have nothing to do with the latest tech developments and instead play on fear of missing out or get-rich-quick schemes.”
NASAA highlighted that some fraudsters are using AI to promote investment opportunities tied to AI-powered trading bots, startups developing AI models, or scams involving account takeovers and identity theft. The organization warned that while these schemes often appear professional with slick designs and dazzling graphics, many promoters are unregistered and operate outside of regulatory oversight.
Affinity fraud and relationship scams remain significant risks as well. Scammers often develop personal relationships with victims before soliciting investments, only to eventually make off with their money. In its 2023 Elder Fraud Report, the FBI said its Internet Crime Complaint Center received reports from 6,740 individuals who were at least 60 years old and lost $357 million to romance and confidence scams.
NASAA advised investors to verify the legitimacy of investment offerings and the individuals promoting them.
“State registration laws are critical to the protection of investors,” said NASAA enforcement section committee co-chair Amanda Senn. “Registered parties must typically demonstrate their qualifications, satisfy background checks, and even open their books and records to periodic state inspection. Investors should always look into the registration status of parties before purchasing investments, especially those promoted over the internet or in social media.”
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