As crypto scams have adopted the latest artificial intelligence (AI) advancements to deceive investors, California regulators are fighting back. The California Department of Financial Protection and Innovation (DFPI) reported on Thursday that scammers have utilized AI to generate fabricated CEOs in an attempt to defraud potential investors.
In response, the DFPI has initiated a crackdown to protect residents from such crypto scams. The agency recently issued cease and desist letters to five firms – Maxpread Technologies, Harvest Keeper, Coinbot, QuantFund, and Visque Capital – accused of making false promises related to profitability and offering unqualified securities.
Companies accused of misrepresenting CEOs in alleged crypto scams
According to the DFPI, these companies made exaggerated claims about increasing their returns by using AI for crypto trading and employed multi-level marketing schemes to lure unsuspecting victims. Maxpread Technologies and Harvest Keeper, in particular, stand accused of misrepresenting their CEOs.
Maxpread Technologies allegedly used a computer-generated avatar named “Gary” to pose as their CEO, while Harvest Keeper purportedly employed an actor to fill the role. The DFPI claims that Maxpread Technologies promoted its “profitability” through a promotional YouTube video featuring an avatar created on Synthesia.io, which was programmed to read a screenplay.
Synthesia.io’s AI technology leverages deep learning algorithms to produce realistic animations and speech, allowing users to generate high-quality content. A YouTube video published on April 8 featured CEO “Michael Vanes.” However, the DFPI asserts that such a person does not exist, and the company’s actual CEO is its former chief marketing officer and corporate brand manager, Jan Gregory.
Forbes reports that Elizabeth Smith, a representative from DFPI, explained in an email that the agency traced the avatar to Synthesio.io, where it was named “Gary.”
Harvest Keeper’s deceptive tactics
Harvest Keeper took a slightly different approach in its deception. The agency alleges that the company hired a human actor to portray its CEO. Despite claiming to use AI to enhance its trading profitability, it appears that Harvest Keeper actually relies on human involvement.
Neither Maxpread Technologies nor Harvest Keeper has responded to the accusations made by the DFPI. As AI continues to advance and becomes more accessible, regulatory agencies must remain vigilant to protect investors from increasingly sophisticated crypto scams.
