The Texas State Securities Board (Texas SSB) recently initiated an investigation into the AI-based crypto scam, TruthGPT Coin. This fraudulent scheme has been linked to false endorsements from notable figures in the tech and cryptocurrency world, including Elon Musk, Changpeng Zhao, and Vitalik Buterin.
The Rise of Rug Pulls and Crypto Scams Exploiting AI Hype
Over the past few weeks, multiple rug pulls, and crypto scams have emerged, with bad actors taking advantage of the growing enthusiasm for artificial intelligence (AI) to swindle investors. The TruthGPT Coin scam is the latest in fraudulent activities targeting unsuspecting victims.
According to a press release issued by the Texas SSB, the individuals behind TruthGPT Coin, Horatiu Charlie Caragaceanu, The Shark of Wall Street, and Hedge4.ai, falsely claimed that their coin would yield a staggering capital appreciation of 10,000 times. They also boasted about their AI model, dubbed “Elon Musk AI,” which they asserted could analyze cryptocurrencies, predict future prices, and even identify scam investment projects.
The Texas SSB has revealed that the project’s creators fabricated the involvement of well-known personalities such as Elon Musk, Changpeng Zhao, and Vitalik Buterin to lend credibility to their deceitful scheme.
Elon Musk’s True AI Startup and the Misleading TruthGPT Coin
Contrary to the claims made by the scammers, Elon Musk plans to launch an AI startup called TruthGPT. The venture aims to compete with OpenAI’s ChatGPT. The TruthGPT Coin project, however, is merely exploiting the hype surrounding Musk’s genuine endeavor.
In light of the ongoing investigation, regulators have issued an emergency cease and desist order against the TruthGPT Coin project. This order mandates that the project immediately cease all activities deemed illegal.
Securities Commissioner Travis Iles commented on the issue, stating, “Artificial intelligence is buzzing. It’s received extensive coverage by traditional media, is trending in social media, and has the potential to impact many industries. Unfortunately, bad actors continue their attempts to capitalize on this widespread public interest.”
He further explained, “They’re devising schemes that create the appearance they have developed sophisticated artificial intelligence platforms – but instead of being rooted in artificial intelligence, the offerings too often are nothing more than frauds.”
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