The Securities and Exchange Commission (SEC) has raised alarm over the rising use of artificial intelligence in financial fraud, cautioning Nigerian investors to be extra vigilant against a fresh wave of AI-driven scams spreading rapidly across the digital space.
According to the commission, many of these fraudulent ventures, often posing as cutting-edge investment platforms, deploy advanced AI tools such as deep fakes and algorithm-generated content to present themselves as authentic.
The SEC explained that the operators behind the schemes entice unsuspecting victims with misleading claims of guaranteed profits, risk-free opportunities, and fabricated endorsements from celebrities, public figures, and media icons.
Recently, platforms including CBEX, Silverkuun, and TOFRO were identified by the regulator as unregistered entities leveraging artificial intelligence to deceive the investing public.
Although none of these outfits had obtained regulatory clearance, they aggressively promoted AI-based trading systems that promised improbable earnings, prompting the SEC to issue repeated disclaimers urging investors to avoid them.
“These platforms are not registered or regulated by the SEC, yet they continue to mislead the public with false claims of AI-driven investments. They posed serious risks to investors,” the commission stressed.
‘AI-driven fraud on the rise’
The SEC expressed concern about the rapid spread of deep fake videos digitally altered clips that convincingly impersonate popular figures being circulated on social media platforms such as Facebook, Instagram, and Telegram.
These manipulated videos, frequently embedded in sponsored ads or viral reels, are intended to deceive potential investors into thinking that well-known personalities have endorsed the fraudulent platforms.
“Scammers are exploiting AI to fabricate endorsements and testimonials that appear genuine. This has made traditional fraud detection methods less effective, hence the need for tech-enabled regulation and greater public awareness.”
In reaction to these developments, the commission disclosed that it is rolling out more sophisticated monitoring tools designed to identify fraudulent practices in real time.
The SEC also confirmed stronger coordination with institutions such as the Central Bank of Nigeria (CBN) and the Nigerian Financial Intelligence Unit (NFIU), enabling better intelligence exchange and unified enforcement action.
“We are moving from reactive to predictive oversight. This is essential in combating fraud and systemic risks in our market,” the SEC declared.
The regulator further revealed that talks have commenced with major social media firms to curb the circulation of deceptive adverts and warned influencers and digital creators against promoting illegal financial schemes.
It cautioned that those found complicit could be subjected to sanctions or legal prosecution.
The SEC advised investors to always confirm the regulatory status of any financial platform through its official website, which hosts a database of licensed capital market operators.
“Any investment that guarantees unrealistic returns or uses manipulated videos of public figures should immediately raise a red flag,” the SEC reiterated.
