Several crypto companies face accusations of fraudulent investment schemes, with two allegedly using actors and AI to impersonate their CEOs.
The California Department of Financial Protection and Innovation (DFPI) has submitted desist and refrain orders to five entities offering crypto trading services linked to artificial intelligence (AI).
According to the press release published on April 19th, all entities violated California securities laws "by offering and selling unqualified securities and making material misrepresentations and omissions to investors."
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The firms in question are Harvest Keeper, Visque Capital, Coinbot, QuantFund, as well as Maxpread Technologies and its CEO, Jan Gregory Cerato.
DFPI claims that two of these entities went as far as using various methods to imitate their CEOs.
Maxpread Technologies allegedly used an AI-generated avatar named "Michael Vanes" to pose as its CEO and promote its products through YouTube advertisements.
Another entity, Harvest Keeper, which asserts it is a crypto trading firm, reportedly hired an actor to portray its CEO, Markus Peters. The DFPI said Harvest introduced Peters as the "leader" and "main generator of ideas."
The regulator claims these entities promised investors "incredible returns." They allegedly claimed to use AI technology to trade crypto assets, and some even employed multi-level marketing schemes to reward investors for recruiting others.
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.
Despite their alleged fraudulent nature, these entities "went to great lengths to appear as if they were legitimate businesses," creating professional websites, social media accounts, and even paying influencers for promotions.
It is worth noting that the websites for Harvest Keeper and Coinbot are no longer accessible. However, the other three firms listed in the desist and refrain order are still active.
This is not the first time California regulator is taking active measures to control fraudulent crypto activity. In February, DFPI introduced Crypto Scam Tracker. DFPI noted that the tracker allows Californian “consumers and investors to do their own research and prevent harm to themselves and others.”
