State regulators crack down on fraudulent cryptos promoted as 'Elon Musk AI Tokens' and 'TruthGPT Coin'
The Texas State Securities Board, including several state regulators, have come together to issue cease-and-desist orders against Horatiu Charlie Caragaceanu and his organizations, The Shark of Wall Street and Hedge4.ai, for promoting two cryptocurrencies named TruthGPT Coin and Elon Musk AI Token. The orders seek to clamp down on what they claim is a fraudulent securities scheme attempting to capitalize on the growing buzz around artificial intelligence (AI).
The TruthGPT Coin is being marketed as a cryptocurrency that utilizes an AI system called Elon Musk AI. The AI model can allegedly examine multiple digital assets, anticipate future cryptocurrency values, and distinguish lucrative investments from fraudulent ones. The parties involved are also promoting TruthGPT Coin as a highly profitable venture, even stating it could increase in worth by a staggering 10,000 times.
The Emergency Cease and Desist Order states that investors are being falsely informed of Elon Musk's endorsement of TruthGPT Coin, and animated avatars and images of Musk are being utilized to give the impression of his support. Promotional media also shows the alleged involvement of other public figures, including Changpeng “CZ” Zhao, the founder and CEO of Binance, and Vitalik Buterin, the co-founder of Ethereum.
Securities Commissioner Travis J. Iles cautioned, "Bad actors continue their attempts to capitalize on this widespread public interest." He explained:
Texas State Securities Board enforcement director Joe Rotunda advised investors to stay vigilant and “to set aside emotion and objectively evaluate every offering – especially when pitched by an unknown person through the internet.”
Related: How is artificial intelligence used in fraud
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