Crypto Firms Under Fire for Allegedly Using AI and Actors to Mislead Investors

According to reports, the regulator is taking strict actions against high-yield investment products due to their tendency to create excessive excitement among investors by promising high returns, only to disappear without a trace later on.

A financial regulator in California claims that a number of businesses that claim to offer cryptocurrency trading services with AI support are actually engaging in “fraudulent investment schemes.” The regulator claims that two of these companies impersonated CEOs using actors and AI, raising questions about the reliability of their business practices.

On April 19, the California Department of Financial Protection and Innovation filed a complaint against the following five businesses: Harvest Keeper, Visque Capital, Coinbot, QuantFund, and Maxpread Technologies. The complaint also named the CEO of each of these companies, Jan Gregory Cerato. Desist and abstain orders were issued against these organizations because they allegedly promised to use artificial intelligence to trade cryptocurrencies.

CA Department of Financial Protection & Innovation

2023-04-19 16:42

Scammers like to deceive investors by using phony CEOs, sham algorithms, & Ponzi schemes. Today, we’ve issued desist and refrain orders to five entities/individuals who violated CA securities laws. For more information: https://t.co/gj13z2OE4G #investing #hyip #Cryptonews https://t.co/MXHPYwVIny

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The regulatory body has stated that two of the crypto companies went as far as fabricating their CEOs. As per the allegations, Maxpread, a technology company, utilized an AI-generated avatar by the name of “Michael Vanes” to pose as the CEO and advertise its offerings. This purported avatar was even featured in promotions on YouTube.

Michael Vanes – Maxpread Technologies CEO

Harvest Keeper, which describes itself as a cryptocurrency trading company, was charged with using an actor to pass for Markus Peters, the company’s CEO. According to the DFPI, Peters was identified by Harvest as the “leader” and “main generator of ideas.”

According to the DFPI, the companies “went to great lengths to appear as if they were legitimate businesses,” including expert websites, social media accounts, and influencer promotions.

While the websites for the other three businesses are still accessible, those for Harvest Keeper and Coinbot are offline.

On its website, Visque Capital offers a number of investment options, the most expensive of which promises investors returns of up to 3% every day.

The DFPI claimed that the organizations were using the hype surrounding AI to entice investors with the promise of “incredible returns” by claiming to use the technology to trade cryptocurrency assets and, among other accusations, use multi-level marketing schemes to pay investors for referring others.

The DFPI stated: “The pitch was straightforward,” adding:

“Investors were told that if they invested funds, these entities would use their knowledge, skill, experience, and AI to trade crypto assets and generate incredible profits for investors. In each case, these claims are false.”

Key Takeaway

• California’s Department of Financial Protection and Innovation is taking strict actions against high-yield investment products.
• The regulator has filed a complaint against five cryptocurrency trading companies, alleging fraudulent investment schemes and impersonation of CEOs using actors and AI.
• The companies used the hype surrounding AI to entice investors with the promise of high returns, which the regulator deems false.

Conclusion

Concerns regarding the dependability and validity of such enterprises have been highlighted by recent allegations made against cryptocurrency trading organizations in California, including those of fraudulent investment schemes and executive impersonation employing actors and artificial intelligence. This may negatively impact the entire crypto ecosystem, underscoring the value of openness and reliable procedures to preserve investor confidence. Before investing in high-yield investment products that promise remarkable returns, investors should exercise caution and complete a rigorous due diligence process.