The use of artificial intelligence (AI) to trade cryptocurrencies has become a hot topic in the investment world. However, the California financial regulator, the Department of Financial Protection and Innovation (DFPI), has recently issued desist and refrain orders against five entities that were using the technology to lure in investors for fraudulent investment schemes.
The DFPI accused the entities of falsely claiming to use AI to trade cryptocurrencies and reward investors with multi-level marketing schemes. Investors were promised incredible returns, with some schemes pledging daily returns of up to 3%. However, the regulator claims that these entities were actually fraudulent and eventually stopped processing withdrawals before going offline, leaving investors with no way to access their funds.
Two of the firms were accused of using actors and AI to impersonate CEOs. Maxpread Technologies allegedly used an AI-generated avatar called “Michael Vanes” to act as CEO and market its products, while Harvest Keeper hired an actor to play the role of its CEO, Markus Peters. The entities went to great lengths to appear as if they were legitimate businesses, creating professional websites, social media accounts, and promotions from influencers.
The schemes initially seemed to work well, with early withdrawals processed and account balances steadily increasing. However, eventually, withdrawals would not be processed, and the website would go offline, leaving investors in the dark. The regulator warned investors to be cautious about such investment products, saying they raise hype with the promise of high returns before going dark.
The recent allegations of fraudulent schemes could damage investor confidence in such products and lead to increased scrutiny from regulators. The websites for Harvest Keeper and Coinbot are currently unavailable, while the websites of the other three entities are still accessible. Visque Capital advertises various investment plans on its website, including a high-end option that pledges a daily return of 3%. For an investment of $50,000, this plan guarantees a profit of approximately $270,000 after a 180-day period.
Investors should exercise caution when investing in such products and ensure they thoroughly research any company claiming to use AI to trade cryptocurrencies. While the technology has the potential to generate significant returns, it is important to remember that no investment is guaranteed, and investors should be wary of schemes that promise quick and easy profits. As always, it is advisable to seek the advice of a financial professional before making any investment decisions.
