Crypto firms alleged to have fake leaders using AI and actors: Cali regulator

by · April 20, 2023

A number of firms claiming to offer artificial intelligence (AI) assisted crypto trading services have been hit with allegations of being “fraudulent investment schemes” by a California financial regulator, with two accused of using actors and AI to impersonate CEOs.

On April 19, the California Department of Financial Protection and Innovation (DFPI) issued cease and desist orders against five entities purporting to use AI to trade cryptoassets including Harvest Keeper, Visque Capital, Coinbot and QuantFund, along with Maxpread Technologies and its CEO Jan. Gregory Cerato.

According to the regulator, two of the firms even falsified their CEOs. The alleged technology firm Maxpread allegedly used an AI-generated avatar called “Michael Vanes” to act as its CEO and market its products, with the supposed avatar appearing in YouTube promotions.

Harvest Keeper, which claims to be a crypto trading firm, was accused of hiring an actor to play the role of CEO Markus Peters. DFPI said Harvest described Peters as the “leader” and “main generator of ideas.”

According to the DFPI, the entities exploited the hype around AI to lure in investors with the promise of “incredible returns” by claiming to use the technology to trade crypto-assets and – among other claims – using multi-level marketing schemes to reward investors for recruiting others.

“The pitch was simple,” DFPI said, adding:

“Investors were told that if they invested funds, these entities would use their knowledge, skill, experience and AI to trade crypto assets and generate incredible profits for investors. In each case, these claims are false.”

The DFPI noted that the entities “went to great lengths to appear as legitimate businesses” and said they created professional websites, social media accounts and influencer campaigns.

The websites of both Harvest Keeper and Coinbot are down, but the websites of the other three companies remain online.

Visque Capital offers a variety of investment plans on its website, the most expensive plan claims that investors will get a return of up to 3% per day.

A screenshot from Visque Capital’s website showing their investment plans. Source: Visque Capital.

Based on an initial investment of $50,000, the plan would supposedly return investors around $270,000 after a full 180 days.

Related: Australian crypto fraud increased by over 162% with almost $150 million lost

DFPI claims the schemes appear to be working well initially, with early withdrawals processed and account balances increasing steadily.

Eventually, however, withdrawals would not be processed and the site would go offline, leaving investors with no way to access their funds.

Cointelegraph contacted Maxspread, Visque and Harvest Keeper for comment, but did not immediately receive a response. Coinbot and Quantfund could not be reached for comment.

Asia Express: Bitcoin glory on Chinese TikTok, 30 million mainland users, Justin Sun saga