Texas regulators have set their sights on an individual who is allegedly promoting two cryptocurrencies that aim to capitalize on Elon Musk’s artificial intelligence (AI) pursuits. The cryptocurrencies are named Elon Musk AI Token and TruthGPT Coin, which is named after Musk’s proposed ChatGPT competitor. The Texas State Securities Board (TSSB) has filed a cease-and-desist order against the cryptocurrencies, alleging that they are part of a fraudulent securities scheme.
Joe Rotunda, the enforcement director for TSSB, suggested that the tokens aim to capitalize on Musk’s AI efforts in an illegitimate manner. He further added that “We’ve got Elon Musk, artificial intelligence – it checks all the boxes… This is an attempt to leverage that popularity to sell products that are fraudulent.”
The promoter behind the two cryptocurrencies is Horatiu Charlie Caragaceanu, a resident of San Francisco and entrepreneur. Caragaceanu claims that the tokens are powered by a trading platform that uses an AI algorithm developed by Musk to create trading strategies. However, it does not appear that Musk has developed any such system. The TSSB has also named Caragaceanu’s company, The Shark of Wall Street, as a promoter of the assets. The regulator further noted that Caragaceanu’s earlier assets, including various non-fungible tokens (NFTs) and a Shark of Wall Street token, have lost their value.
Other Attempts to Capitalize on AI Projects
In recent months, several crypto projects have attempted to capitalize on trends related to ChatGPT and other AI projects. One such example is CryptoGPT, which aims to use AI but has no direct connection to the ChatGPT chatbot. Additionally, there are several fraudulent examples of ChatGPT honeypot tokens.
On May 2, digital artist Rhett Mankind claimed to have used AI to create a meme coin that saw $26 million in trading volume on Uniswap over 24 hours.
In conclusion, it is important for regulators to crack down on fraudulent securities schemes that attempt to leverage the popularity of famous individuals and AI projects. The TSSB’s efforts to stop the promotion of Elon Musk AI Token and TruthGPT Coin are a step in the right direction to protect investors from potential fraud.