Exposing Fraudulent Crypto Firms: AI and Actors in Elaborate Scams

CryptoMode Cryptocurrency Hacking Attack Crypto Networks Scams

The financial world is no stranger to scams and fraudulent schemes, and the crypto industry has recently come under fire as a series of companies have been accused of running elaborate investment schemes. The California Department of Financial Protection and Innovation (DFPI) has issued desist and refrain orders against several crypto firms, alleging the use of artificial intelligence (AI) and actors to impersonate CEOs and create a false sense of legitimacy.

AI-Generated Avatars and Actors Fueling Crypto Scams

Among the accused companies are Harvest Keeper, Visque Capital, Coinbot, QuantFund, Maxpread Technologies, and its CEO, Jan Gregory Cerato. In an unusual twist, Maxpread Technologies and Harvest Keeper have been accused of using AI-generated avatars and actors to fake their CEOs’ identities.

Maxpread Technologies allegedly employed an AI-generated avatar named “Michael Vanes” as its CEO, marketing its products through YouTube promotions. Likewise, harvest Keeper, a purported crypto trading firm, has been accused of hiring an actor to impersonate its CEO, Markus Peters, who was presented as the company’s leader and primary source of ideas.

The DFPI alleges that these entities capitalized on the growing interest in AI to attract investors with promises of substantial returns. These firms claimed to utilize AI technology to trade crypto assets, generating impressive profits for their investors. Additionally, they were said to have used multi-level marketing schemes to incentivize investors to recruit others.

However, the DFPI has declared these claims to be false. The regulator noted that these companies went to great lengths to appear legitimate, creating professional websites, maintaining social media accounts, and securing influencer promotions.

Initial Success, Followed by Inevitable Collapse

The DFPI explained that these schemes appeared to function well initially. Early withdrawals were processed, and account balances showed steady growth. However, the situation eventually deteriorated, with withdrawal requests going unprocessed and company websites disappearing, leaving investors without access to their funds.

Visque Capital, for example, offered several investment plans on its website, including a high-end plan claiming daily returns of up to 3%. With an initial investment of $50,000, investors were led to believe they could expect returns of approximately $270,000 after 180 days. Scams will often promise impossible returns to lure in unsuspecting users. 

This latest expose by the California regulator highlights the importance of maintaining strict oversight and regulation in the financial industry, particularly within the rapidly-evolving world of crypto trading. As technology advances and new opportunities emerge, investors and regulators alike must remain vigilant against potential scams and fraudulent investment schemes.

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