Amid the rising popularity of AI tools, financial regulators from Montana, Texas, and Alabama have joint forces to file a lawsuit against the crypto trading platform YieldTrust.ai, accusing it of being a Ponzi scheme.
YieldTrust.ai is an artificial intelligence-based trading bot, which can execute 70 times more trades with 25 times higher profits than any human trader could.
Regulators have alleged that YieldTrust.ai is illegally touting its dApp without providing any concrete evidence about YieldBot that an AI trading bot even exists, let alone that it is performing at the level it claims.
The Montana regulator’s cease and desist order revealed that YieldBot was created for Binance’s BNB Smart Chain and could connect with staking programs to produce returns for new investors at a rate of up to 2.2% per day.
“Analyzing the crypto markets and – in milliseconds – make its own trading decisions, autonomously choosing from hundreds of trading methods and chaining them together to create unique strategies – achieving an exhilarating performance.”
Allegedly, the state regulators called this false, citing a report from the auditing firm. During the investing YieldBot’s smart contract, they found it “dangerous the deploying team retained sufficient control to block users from withdrawing their assets.”
In a Tweet, Montana’s securities commissioner, Troy Downing stated that scammers want to capitalize on the hype around AI “by developing high-tech ploys to deceive investors.”
Montana’s regulatory body has issued an order requiring YieldTrust.ai to immediately stop all its activities within the state and pay $100,000 in fines. Meanwhile, the Texas State Securities Board has also issued several cease and desist orders against YieldTrust.ai.
Also Read: Top 10 Crypto Trading Bots for 2023
