- DFPI claims that Maxpread Technologies allegedly used an AI-generated avatar called”Michael Vanes” to pretend to be its CEO and promote its products through YouTube advertisements.
- The regulator has accused Harvest Keeper, a company that purports to be a crypto firm, for employing an actor to portray its CEO,
The California Department of Financial Protection and Innovation (DFPI) has taken action against five entities offering crypto trading services linked to artificial intelligence, accusing them of violating California securities laws by “offering and selling unqualified securities and making material misrepresentations and omissions to investors.”
The firms which have been issued desist and refrain orders are Harvest Keeper, Coinbot, Visque Capital, QuantFund, Maxpread Technologies, and its CEO, Jan Gregory Cerato. According to the regulator, these entities promised investors “incredible returns” by claiming to use AI technology to trade crypto assets and generate profits for investors. The regulator notes that these entities were taking advantage of the hype surrounding AI to lure in investors.
The DFPI has accused Harvest Keeper, a company that purports to be a crypto trading firm, of employing an actor to portray its CEO, Markus Peters. According to the DFPI, Harvest Keeper represented Peters as the “main generator of ideas” and the “leader” of the firm.
The financial regulator claims that Maxpread Technologies allegedly used an AI-generated avatar named “Michael Vanes” to pose as its CEO and promote the company products through YouTube advertisements.
The DFPI further alleges that initially, schemes seemed to be working well, with early withdrawals processed and account balances steadily increasing. The regulator notes that after a while, the withdrawals would eventually not be processed, and the website would go offline, leaving investors unable to access their funds.
“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” DFPI alleges
The financial regulator added that the companies promised between 0.6% and 4.81% daily returns on investments. As per the regulator, the investment plans offered by the firms claimed that an initial investment of $50,000 could fetch returns of approximately $270,000 after a complete tenure of 180 days.
The latest development is part of DFPI’s increased crackdown and regulatory efforts in the crypto space. Earlier this year, DFPI had introduced Crypto Scam Tracker, which is a database — searchable by company name, scam type, or keywords — for consumers to learn more about crypto-specific complaints the DFPI has received.