Artificial intelligence is hot right now, and crypto scams aren’t slowing down. And allegedly, some scammers are massing them to deceive and defraud potential investors, including creating a fake AI-generated CEO to try and trick people.
This week, the California Department of Financial Protection and Innovation (DFPI) announced its latest efforts to protect residents from crypto scams, sending cease and desist letters to five companies it claims of this trying to profit from the AI hype train.
The agency’s latest targets are Maxpread Technologies, Harvest Keeper, Visque Capital, Coinbot, and QuantFund—all of whom the DFPI has accused of offering unqualified securities and making false promises to investors. DFPI accused the companies of making exaggerated claims about generating high returns using AI for crypto trading, and layering multi-level marketing tactics to entice victims to no doubt.
In addition to trying to scam investors out of money, Maxpread Technologies is accused of “trying to deceive investors about the identity of the CEO using a fake, AI-generated avatar programmed to recite a script.”
In a YouTube video posted on its official Maxpread account on April 8, a claimed CEO named “Michael Vanes” gave an address about the company’s launch. But the agency claims it is not a real person; The real CEO of Maxpread is Jan Gregory, whom the company calls its chief marketing officer and corporate brand manager.
A screenshot showing Maxpread’s alleged fake, AI-generated CEO. Image: California DFPI
Another company, Harvest Keeper, allegedly hired an actor to play its CEO—no AI-generated leaders in sight in that case, although the company claims to be using AI to boost crypto returns trading.
“Scammers are taking advantage of the recent buzz about artificial intelligence to lure investors into bogus schemes,” DFPI Commissioner Clothilde Hewlett said in a statement. “We will continue our efforts to protect California consumers and investors by going after these unscrupulous actors.”
Branding them Ponzi schemes, the California regulator said investors were told that if they invested in the funds, the companies would use their knowledge, skills, experience, and AI help to sell crypto assets and generate profits. extraordinary profit for investors.
“In every case, these claims are false,” the DFPI wrote, saying that the companies promised between 0.6% and 4.81% daily return on investments.
The cease and desist letters are the latest in actions by California regulators to crack down on crypto crime in the state. After the collapse of FTX, the DFPI joined other state regulators in opening an investigation into the cryptocurrency exchange and its founder, Sam Bankman-Fried. In December, the DFPI ordered MyConstant to stop offering selected crypto products, as the DFPI prohibited the sale of securities, including the main lending platform and interest-bearing accounts.
“The entities named have been ordered to cease operating in California because they have violated securities law,” a DFPI spokesperson said. Decrypt. “This means no selling or even offering ‘investments’ like this to California residents.”
Although the agency refers to it as California, Maxpread Technologies’ website claims that it and its affiliates do not target customers or operate in the United States. Maxpread, Harvest Keeper, Visque Capital, Coinbot, and QuantFund did not immediately respond to DecryptRequests for comment.