NASAA warns investors about rising crypto and AI-related scams

The North American Securities Administrators Association (NASAA) has identified crypto scams as one of the leading threats that retail investors must be aware of. The body, which comprises the securities regulators in all the US states, Canadian provinces, and Mexico, described it as a “critical threat.”

According to its press release, it developed a list of major risks facing retail investors by surveying securities regulators in the US and Canada and examining what they spent the most time investigating. The survey showed that most of the scams used marketing tactics that manipulated investors emotions.

While most scams involved marketing digital assets and AI investments, NASAA observed that the scammers used traditional social media platforms to target their victims.

In terms of the prevalence of use, Facebook had 31.7%, text-based platforms like WhatsApp and Instagram had 31.3%, short-form video platforms such as Instagram reels and TikTok had 19%, while long-form video platforms like Vimeo and YouTube had 14.1%.

As the Association noted, scams are prevalent on digital platforms because they are effective in reaching a wide audience as quickly as possible. This allowed these scammers to have access to a wide group of victims.

AI functioned as both a scam tool and a tactic

Meanwhile, the group also observed that scammers are increasingly relying on artificial intelligence tools to create content and graphics and deepfake audio and videos. It expects this to increase in 2025 and highlights the market for it.

It wrote:

“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.”

Beyond using it as a tool, NASAA noted that scammers are also promoting AI-related financial instruments. According to the president of the Association, Leslie Van Buskirk, AI technologys rapid growth has given scammers new tools to steal from users

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 along with other heightened emotions.”

In order to protect investors from these scams, state securities administrators believe that registration at the state level is essential. The NASAA enforcement section committee co-chair Amanda Senn noted that investors need to confirm the registration status of anyone promoting a financial institution to them on the internet or social media before they invest.

Crypto-related scams and losses continue to happen

The statement from NASAA only confirms earlier opinions from other regulators, including the Federal Bureau of Investigation (FBI), about the prevalence of financial scams connected to digital assets. Last month, the FBI revealed that it has saved almost $300 million in crypto-related investment fraud for thousands of victims.

Interestingly, scams are not the only challenge that retail investors face. Even those who avoid investing in fraudulent crypto assets and buy real ones are still at risk of losing their funds to phishing attacks, hacks, and other security compromises like the Bybit hack that resulted in the loss of more than $1.4 billion worth of Ethereum.

Onchain transaction data showing phishing attack (Source: Scam Sniffer on X)

Today, ScamSniffer reported that a victim lost over $117,000 in two phishing attacks. The attacker used the Permit2 phishing signature to steal the funds without the victims knowledge. Unsurprisingly, most of these phishing links are also scam promotions on social media.