Multiple US state regulators allege AI trading dApp is a Ponzi scheme
Securities regulators from Montana, Texas, and Alabama have jointly filed enforcement actions against cryptocurrency trading platform YieldTrust.ai alleging it is “perpetrating a Ponzi scheme.”
According to April 4 statements from the Montanian, Texan and Alabamian regulators, YieldTrust.ai and its Romanian owner, Stefan Ciopraga, claimed the decentralized application (dApp) called "YieldBot" is “powered by cutting-edge artificial intelligence” and is “capable of executing 70 times more trades with 25 times higher profits than any human trader could.”
The regulators alleged YieldTrust didn’t provide “any proof” to investors that the artificial intelligence (AI)-powered bot exists, “let alone that it is performing at the level YieldTrust.ai claims.”
Montana’s regulator stated in its cease and desist order that YieldBot was developed for Binance’s BNB Smart Chain and could interface with staking programs to generate returns for new investors of up to 2.2% per day through:
However, the state regulators claimed an independent firm that conducted an audit of YieldBot’s smart contract found it was “dangerous” as “the deploying team retained sufficient control to block users from withdrawing their assets.”
As noted by the regulator's statements and highlighted in an April 4 tweet from Montana’s securities commissioner, Troy Downing, scammers are apparently capitalizing on the hype surrounding AI “by developing high-tech ploys to deceive investors.”
Artificial intelligence may be an exciting concept, but scammers are attempting to capitalize on the excitement by developing high-tech ploys to deceive investors.#AI #SecuritiesFraud #InvestmentScam #MTNews https://t.co/FMSqLJW40E
An order from Montana’s regulator demands YieldTrust.ai
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