The Securities and Exchange Commission has warned of a surge in Artificial Intelligence driven scams.

The regulator noted that fraudsters are using AI to generate manipulated videos of politicians, celebrities, and media personalities, which are being circulated through Facebook ads, Instagram reels, and Telegram groups.

In a statement on Sunday, SEC said the videos are designed to look authentic, luring unsuspecting investors with fake endorsements and promises of guaranteed profits.

The regulator stressed that these platforms are neither registered nor regulated, posing significant risks to the investing public.

It added that the latest schemes hinge on doctored AI-generated videos designed to deceive and lure unsuspecting victims.

The manipulated clips are being aggressively pushed on social media, often through paid advertisements and influencer promotions.

“The commission observed that manipulated videos featuring politicians, celebrities, and TV hosts were being circulated via Facebook advertisements, Instagram reels, and Telegram groups. These platforms are not registered or regulated by SEC,” the statement read.

The regulator pointed out that entities like CBEX, Silverkuun, and TOFRO had previously operated illegally, promoting AI-driven trading systems with promises of unrealistic returns.

SEC noted that it had issued public disclaimers against the activities of these firms after investigations showed they posed serious risks to investors.

To address the growing threat, the Commission disclosed that it has deployed an advanced surveillance system designed to detect fraudulent activities in real time.

“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,” SEC said.

The Commission emphasized that it is shifting from a reactive stance to predictive oversight to stay ahead of fraudsters.

“This is essential in combating fraud and systemic risks in our market,” it added.

SEC also cautioned influencers and online promoters against partnering with unlicensed investment schemes, warning that such actions could attract regulatory sanctions and possible prosecution.