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April 05, 2023 at 09:15 AM
Texas, Montana and Alabama have jointly filed what they believe is the first securities case targeting a promotion tied to artificial intelligence. It involves crypto, too.
Securities regulators for the three states filed enforcement actions to stop YieldTrust.ai from soliciting investments tied to a decentralized application that promises to use AI to trade digital assets.
The app claimed to offer returns of 2.6% per day for four months by being able to execute 70 times more trades with 25 times higher profits than any human trader, according to the cease-and-desist orders.
The case is one of many alleged scams involving AI, Joe Rotunda, director of the enforcement division at Texas State Securities Board, said in an interview.
Like cryptocurrencies in 2021, when many hit all-time highs, AI is red-hot now, drawing investors, employees — and crooks. The market for AI reached $136.5 billion last year, and is projected to grow at a compound annual rate of 37% through 2030, according to Grand View Research.
“We recognize that the bad actors in the market are going to always follow the headlines,” Rotunda said. “AI has become a very trendy topic. There’s been a tremendous rise in suspect investment offerings tied to artificial intelligence.”
