The California Department of Financial Protection and Innovation has cracked down on several crypto firms, alleging that they operated fraudulent investment schemes by using AI-generated executives and actors. The department issued cease and desist orders against five entities that claimed to use AI to trade crypto assets, including Visque Capital, Harvest Keeper, Coinbot, and QuantFund. Maxpread Technologies as well as its CEO Jan Gregory Cerato were also included in the orders.
According to the regulator, two of the companies used AI-generated executives to promote their products. Maxpread Technologies allegedly used an AI-generated avatar named “Michael Vanes” to act as its CEO and market its products in YouTube promotions. Harvest Keeper, on the other hand, appointed an actor to portray the character of its CEO, Markus Peters. The regulator noted that the entities took advantage of the hype surrounding AI to lure investors by promising “incredible returns.”
As per the California Department of Financial Protection and Innovation (DFPI), the crypto firms in question went to great lengths to deceive potential investors. They allegedly created websites and social media accounts with a professional appearance and even sought endorsements from social media influencers to project an illusion of legitimacy. Moreover, the companies purportedly offered multi-level marketing programs, incentivizing investors to bring in others and earn rewards, further perpetuating the fraud.
The entities allegedly enticed investors by promising to leverage their expertise, experience, and AI technology to trade crypto assets and generate substantial profits. The DFPI, however, stated that these claims were false. The regulator noted that the schemes would seem to be working initially, with early withdrawals processed, and account balances increasing steadily. As per the DFPI, investors were left stranded with no way to access their funds as the schemes allegedly stopped processing withdrawals and eventually shut down their websites.
The websites for Coinbot and Harvest Keeper are down, but the other three websites remain online. Visque Capital, for instance, offers a range of investment plans on its website, with the most expensive plan claiming investors would see returns of up to 3% per day. According to the regulator, the investment plans offered by the firms claimed that an initial investment of $50,000 could fetch returns of approximately $270,000 after a complete tenure of 180 days, as stated by media reports.
