‘Buy mining power, we take care of the rest.’ ‘Our artificial intelligence bot makes 2% a day.’ These promises of automatic income are among scammers' favourites, because they combine two subjects few people really understand: mining and AI. Here is how to spot them.
Cloud mining: renting machines remotely
The idea is simple: instead of buying a mining machine and installing it at home, you rent a share of the computing power of machines in a data centre, and receive the corresponding bitcoins, minus fees.
Legitimate offers exist, but their profitability follows exactly the same rules as mining at home: the bitcoin price, network difficulty, the cost of electricity. They therefore cannot guarantee a fixed return.
Warning signs specific to cloud mining
- a fixed daily return or a ‘guaranteed’ one, whatever the bitcoin price;
- no verifiable information about the machines, their location and their owner;
- multi-level referral bonuses: you are paid to recruit;
- ‘lifetime’ contracts or contracts with no end date;
- withdrawals only possible above a threshold, or after paying fees.
‘Artificial intelligence’ trading bots
A trading bot is software that buys and sells automatically according to rules. Large investment funds use them, with teams of specialists and considerable resources. The versions sold to individuals with a promise of high returns are, in the vast majority of cases:
- either fake platforms that display fictitious gains to push you to deposit more, before blocking withdrawals;
- or Ponzi schemes, where early users' ‘gains’ are paid with later users' deposits;
- or real tools with no edge, sold mainly for the subscription.
The US derivatives regulator (CFTC) has warned against AI trading bot promises, and Belgium's FSMA regularly flags fraudulent platforms using this vocabulary.
The impossible-return test
A return of 1% a day, reinvested, turns €1,000 into about €37,800 in a year. At that rate, a company that truly mastered such a method would become the richest in the world within a few years, and would have no reason to look for your money.
A fixed, high, effortless return does not exist. If someone offers you one, the question is not ‘is it a scam?’ but ‘where is the scam?’.
The impossible-return test
Enter the promised daily return and see what it would produce in a year.
Checks before investing
- Is the company authorised? By your financial regulator (the FSMA in Belgium), and in the ESMA MiCA register for crypto services in the EU.
- Is it on the warning list of the FSMA or another regulator?
- Can you explain in two sentences where the return comes from?
- Do your earnings depend on recruitment? If so, reread our article on pyramid schemes.
- Have you tested a small withdrawal? Even if it works, it proves nothing: scams often let you withdraw at first.
For the full list of warning signs, see financial scams.
Where to find these services
- FSMA, unauthorised companiesTo check before any deposit
- I-SCAN (IOSCO)Warnings from regulators worldwide
- ESMA MiCA registerTo check that a crypto platform is authorised in the EU
Links provided for information, with no partnership. Always check a provider's terms and authorisation before committing.
Test yourself
3 questions to check what you remember. Click an answer: the explanation appears straight away.
Question 1 of 3A cloud mining offer guarantees 1% a day. This is…
Mining depends on the bitcoin price, difficulty and electricity: no fixed return is possible.
Question 2 of 31% a day reinvested for a year multiplies capital by about…
1.01 to the power of 365 ≈ 37.8: no real activity produces that.
Question 3 of 3A platform lets you withdraw €50 at the start. Is that proof it is legitimate?
Larger withdrawals are then blocked, or subject to ‘fees’.
Frequently asked questions
Is cloud mining always a scam?
No, legitimate offers exist, but they cannot guarantee a fixed return: their profitability depends on the bitcoin price, network difficulty and electricity. A promise of a fixed return is a major warning sign.
Do AI trading bots work?
Those sold to individuals with a promised high return are usually fake platforms or Ponzi schemes. No tool guarantees a return in the markets.
How do you check a cloud mining or trading platform?
Check its authorisation (financial regulator, ESMA MiCA register), consult warning lists, ask exactly where the return comes from and be wary of referral bonuses.
Sources
This article is educational and is not personal investment, tax or legal advice. Figures change: check them with the sources cited or a licensed professional before deciding. Read the full disclaimer.