Crypto fraudsters have reportedly used artificial intelligence and actors to scam investors
The number of crypto scammers targeting naive investors is rising in line with the growing interest in artificial intelligence.
In a disturbing trend, some crypto fraudsters are now combining the two, using AI to create fake CEOs and other executives in an attempt to trick and defraud potential victims.
On Thursday, the California Department of Financial Protection and Innovation (DFPI) accused five financial services firms of exploiting investor interest in cryptocurrencies by capitalizing on the buzz surrounding artificial intelligence.
Crypto fraudsters use artificial intelligence to create fake CEOs
Maxpread Technologies and Harvest Keeper, two of the companies, are accused of misrepresenting their CEOs by using an actor for one and a computer-generated avatar named “Gary” for the other.
According to DFPI, the company claimed its “profitability” through a promotional video on YouTube using an avatar built on Synthesia.io and programmed to read a script.
Fraudsters like to trick investors by using fake CEOs, fake algorithms and Ponzi schemes. Today, we have issued cease and desist orders to five entities/individuals that have violated CA’s securities laws. For more information: https://t.co/gj13z2OE4G#investment #hyip #Cryptonews pic.twitter.com/MXHPYwVIny
— CA Department of Financial Protection & Innovation (@CaliforniaDFPI) 19 April 2023
Synthesia.io is a video generation platform that uses artificial intelligence to create lifelike video content. The platform allows users to create video content by simply typing out the script or uploading a voiceover, then selecting an AI-generated presenter or avatar to deliver the content on screen.
Synthesia.io’s AI technology uses deep learning algorithms to create realistic animations and speech, enabling users to generate high-quality video content quickly and efficiently.
On April 8, a video with an address allegedly given by CEO “Michael Vanes” was uploaded to the official Maxpread YouTube channel.
Using the latest technology to deceive people
However, the agency claims that this figure does not exist and that Jan Gregory, the company’s former marketing and corporate brand manager, is in fact Maxpread’s true CEO.
Elizabeth Smith, a DFPI representative, told Forbes in an email that the agency’s enforcement team had traced the avatar’s origins to the online 3D modeling and animation platform Synthesia.io, where it had been named “Gary.”
The supposed avatar, who appears to be a middle-aged bald man with a salt-and-pepper beard, rambles on and on in a synthetic voice throughout the video’s seven minutes.
By contrast, Harvest Keeper will have hired a human actor to perform the role of CEO; despite the company’s claim to use AI to improve crypto trading profits, it seems the company instead relied on a human boss.
In a statement, DFPI Commissioner Clothilde Hewlett said:
“Fraudsters are taking advantage of the recent buzz around artificial intelligence to lure investors into bogus schemes.”
Hewlett said they will continue to aggressively pursue these crypto scammers so that Californians and their investments are safe.
Crypto total market cap slides to $1.11 trillion on the weekend chart at TradingView.com
Both organizations have been silent in the face of the accusations. This episode illustrates the need for regulatory oversight and caution against misuse of artificial intelligence in the financial sector.
As these crypto fraudsters rely on cutting-edge technology to fabricate identities and manipulate data, they are becoming increasingly difficult to spot.
As a result, investors need to be extra vigilant and do their due diligence before investing in any crypto project or startup, no matter how promising it may seem at first glance.
-Featured image from ArtemisDiana | iStock/Getty Images Plus
