Regulators of three states in the US have filed the first securities lawsuit targeting an AI-connected ponzi scheme.
Regulators in the US states of Texas, Montana, and Alabama jointly filed the first AI securities lawsuit. At the center of the lawsuit is YieldTrustAI’s emphasis on using artificial intelligence to trade digital assets. Three regulators initiated legal proceedings to stop the project using artificial intelligence from demanding decentralized investments.
Artificial Intelligence Themed Securities Litigation
YieldTrustAI claimed that its artificial intelligence algorithm processed 70 times more trades with 25 times higher profits than any human trader. The platform offered a daily return on earnings of 2.6 percent. US regulators have suggested that these promised AI returns are ponzi schemes.
This artificial intelligence project and ponzi scheme claims, which are the subject of the lawsuit, also revealed the first securities lawsuit on artificial intelligence.
Joe Rotunda, executive director of the Texas State Securities Board, said:
“We realize that bad actors in the market will always follow the headlines. Artificial intelligence has become a very fashionable topic. There has been a tremendous increase in questionable investment offers linked to AI.”
Rotunda stated that this lawsuit, which was filed, deals with the allegation of artificial intelligence fraud. In addition, Rotunda stated that he acted in the role of a potential investor while researching YieldTrust, watching the project’s promotional videos for hours and observing the app’s Telegram channel.
Thinking that such practices are a complete trap, the Texas executive stated that a brand new threat has emerged for the public. Also, the website of YieldTrust, which is the subject of the lawsuit, is down.
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