- YieldTrust.ai accused of running Ponzi scheme
- Regulators question existence of AI-powered bot
- Montana, Texas, Alabama file actions
Cryptocurrency trading platform YieldTrust.ai is facing legal action from securities regulators in Montana, Texas, and Alabama, who have accused the platform of operating a Ponzi scheme. The regulators are specifically targeting the company’s claims about its decentralized application (DApp), YieldBot.
In statements released on April 4, the regulators allege that YieldTrust.ai and its Romanian owner, Stefan Ciopraga, falsely claimed that YieldBot, powered by advanced artificial intelligence (AI), can execute 70 times more trades and generate 25 times higher profits than any human trader. The regulators argue that YieldTrust provided no evidence to support the existence or performance of the AI-powered bot.
According to Montana’s cease and desist order, YieldBot was allegedly developed for Binance’s BNB Smart Chain, and was designed to interface with staking programs to generate returns for new investors of up to 2.2% per day. However, the state regulators assert that an independent firm’s audit of YieldBot’s smart contract revealed it to be “dangerous,” as the deploying team maintained enough control to prevent users from withdrawing their assets.
Montana’s securities commissioner, Troy Downing, highlighted in an April 4 tweet that scammers are increasingly exploiting the excitement around AI to create sophisticated schemes aimed at deceiving investors.
In response to the allegations, Montana’s regulator has demanded that YieldTrust.ai halt all operations in the state and is seeking $100,000 in fines. Additionally, the Texas State Securities Board has issued multiple cease and desist orders against the company. Since these actions, YieldTrust.ai’s website has been taken down and its Twitter account deleted.
In other news, BTG Pactual, one of the major financial institutions in Latin America, is entering the digital assets market with the launch of BTG Dol, its own stablecoin. According to its name, the BTG Dol will be linked to the US dollar at a parity of 1:1.
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José is a crypto enthusiast who trades crypto night and day. He loves to share his trading stories and experiences in all his published articles. José likes to hang out and travel to meet new friends. Enjoys sushi, vodka, and tequila.
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