A California Financial Regulator has accused a number of firms offering artificial intelligence-assisted crypto trading services with allegations of being ‘’fraudulent investment scheme’’ , with two of them allegedly accused of using actors and AI to impersonate CEO’s.
Five Entities namely Harvest Keeper, Visque Capital, Coinbot and QuantFund along with Maxpread Technologies and its CEO Jan Gregory Cerato were issued desist and refrain orders by the California Department of Financial Protection pretending to use AI to trade crypto assets.
As reported by the regulator, the CEOs of two of the firms namely Maxpread and Harvestkeeper were even faked by them. While the purported technology firm Maxpread is alleged to have used an AI-generated avatar called “Michael Vanes” to act as CEO and market its products, with the supposed avatar appearing in YouTube promotions.The firm Harvest Keeper, which claimed itself a crypto trading firm, was accused of having hired an actor to play the role of its CEO, Markus Peters. The DFPI said Harvest described Peters as being the “leader” and “main generator of ideas.”
As per DFPI, the entities were playing with trump card of the hype surrounding AI to allure the investors with the promise of “incredible returns” by asserting to use the technology to trade crypto assets and — amongst other allegations — use multi-level marketing schemes to reward investors for recruiting others.
The DFPI said, “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.”
It was further noted that the entities “went to great lengths to appear as if they were legitimate businesses” and allegedly created professional websites, social media accounts and promotions from influencers While the websites for both Harvest Keeper and Coin Bot are down, the websites for the other three firms still remain online.
Visque Capital offers a range of investment plans on its website, the most expensive plan claims investors would see returns of up to 3% per day. Based on an initial investment of $50,000, the plan would supposedly give investors a return of around $270,000 after the full 180 days.
The schemes as asserted by DFPI seemed to be working well at first , with early withdrawals processed and account balances steadily increasing.After a while , however, withdrawals would not be processed and the website would go offline, leaving investors with no way to access their funds.
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