Securities Commissioner Travis J. Iles issued an Emergency Cease and Desist Order to halt an investment scheme allegedly powered by artificial intelligence and endorsed by Elon Musk.
Texas Securities Board Targets Alleged AI-Powered Crypto Scam
Securities Commissioner Travis J. Iles issued an Emergency Cease and Desist Order to halt an investment scheme allegedly powered by artificial intelligence and endorsed by Elon Musk. The Texas State Securities Board led a group of regulators in bringing coordinated actions against Horatiu Charlie Caragaceanu and his organizations, The Shark of Wall Street and Hedge4.ai. The scheme involves the promotion of TruthGPT Coin, a cryptocurrency claimed to use an AI model called Elon Musk AI, which is said to analyze cryptocurrencies, predict future digital asset prices, and differentiate profitable investments from scams.
According to the order, investors are being told that Elon Musk endorses TruthGPT Coin, with animated avatars and images of Musk being used to demonstrate his endorsement. The website for TruthGPT Coin (truthgptc.com) allegedly creates the appearance that Changpeng “CZ” Zhao, the founder and CEO of Binance, and Vitalik Buterin, the founder of Ethereum, are part of the ecosystem. The Texas action alleges that Caragaceanu, The Shark of Wall Street, and Hedge4.ai have engaged in a series of initial coin offerings (ICOs), touting the profitability of the tokens through internet websites and social media. However, the tokens never significantly increased in price and their fair market value is now $0, according to the orders.
TruthGPT Coin and the other investments named in the order have not been registered for sale in Texas, and Horatiu Charlie Caragaceanu, The Shark of Wall Street, and Hedge4.ai have not been registered as dealers or agents. They have 30 days to request a hearing. The crackdown on fraudulent schemes involving AI highlights the regulators' commitment to protect investors and ensure compliance with securities laws.
