Germany’sFederal Financial Supervisory Authority (BaFin) has issued awarning to consumers about a series of nearly identical online platforms thatclaim to offer automated trading of financial instruments using artificialintelligence (AI). Accordingto BaFin, these websites are operating without the necessary regulatoryapproval and may pose significant risks to investors.German Regulator BaFinWarns Public About 20 Unlicensed AI Investment PlatformsTheregulator reports that the flagged platforms advertise AI-driven tradingservices with a minimum investment requirement of 250 euros. None of thewebsites provide clear information about their operators or a legal notice, andnone are supervised by BaFin. The authority has identified at least 20 suchwebsites, including geldgrix.de, immedintax.xyz, beraventex.org, invexorix.de, andseveral others.“We urgethe public to exercise extreme caution with online investment offers,especially those that promise automated trading or unusually high returns.Always check the legitimacy of providers before investing,” BaFin commented inthe warning.Artificialintelligence is playing an increasingly prominent role in the world of retailtrading. On one hand, it’s being used toenhance services offered to traders; on the other, it introduces new risksto the financial ecosystem.You mayalso like: BaFinReports 74% of German Retail Turbo Traders Lost Money, €3.4B GoneAI Risks in Retail TradingAt thebeginning of last year, AI-generatedexplicit images of Taylor Swift spread rapidly across the internet. Whileinitially seen as a privacy issue for celebrities, the incident highlightedbroader concerns about deepfake technology, particularly its potential toundermine identity verification insectors like banking and trading. Thesehyper-realistic forgeries could convincingly impersonate real individuals,posing a serious threat to the integrity of financial institutions' onboardingand compliance procedures.In adigital world where many retail investors trustonline influencers more than their families or certified financialadvisors, the possibility of deepfakes impersonating figures likeElon Musk or local “finfluencers” has become more alarming than ever.Earlierlast year, the U.S. Commodity Futures Trading Commission (CFTC) alsoflagged the growing use of AI in fraudulent investment schemes. Many ofthese scams involve self-learning trading bots that promise unrealisticallyhigh returns. More recently, the commission emphasized that AI applications intrading shouldbe subject to regulation and fall under existing legal frameworks.Inrelated news: CryptoYoung Investors: BaFin Study Reveals over 50% Trust Social Media andFinfluencersBaFin PowersUnderGerman law, any entity offering financial or investment services must obtain alicense from BaFin. The regulator emphasizes that operating without suchauthorization is illegal. Consumers can verify whether a company is licensed byconsulting BaFin’s official company database.BaFin’swarnings are based on Section 37 (4) of the German Banking Act, whichempowers the authority to alert the public about unauthorized financial serviceproviders. The regulator, along with the Federal Criminal Police Office (BKA)and state criminal police offices, strongly advises consumers to be vigilantwhen considering online investments. They recommend thorough research toidentify potential fraud before making any financial commitments.This article was written by Damian Chmiel at www.financemagnates.com.