The number of crypto scammers targeting naive investors rises in tandem with the rising interest in Artificial Intelligence.

In a disturbing trend, some crypto scammers are now combining the two, using AI to create fake CEOs and other executives in a bid to deceive and swindle potential victims.

On Thursday, the California Department of Financial Protection and Innovation (DFPI) charged five financial services firms with exploiting investor interest in cryptocurrencies by capitalizing on the buzz surrounding artificial intelligence.

Crypto Scammers Use AI To Create Fake CEOs

Maxpread Technologies and Harvest Keeper, two of the companies, are accused of misrepresenting their CEOs by using an actor for one and a computer-generated avatar by the name of “Gary” for the other.

According to the DFPI, the company touted its “profitability” through a promotional YouTube video using an avatar built on Synthesia.io and programmed to read a screenplay.

Scammers like to deceive investors by using phony CEOs, sham algorithms, & Ponzi schemes. Today, we’ve issued desist and refrain orders to five entities/individuals who violated CA securities laws. For more information: https://t.co/gj13z2OE4G#investing #hyip #Cryptonews pic.twitter.com/MXHPYwVIny

— CA Department of Financial Protection & Innovation (@CaliforniaDFPI) April 19, 2023

Synthesia.io is a video generation platform that uses artificial intelligence to create lifelike video content. The platform allows users to create video content by simply typing out the script or uploading a voiceover, and then selecting an AI-generated presenter or avatar to deliver the content onscreen.

Synthesia.io’s AI technology uses deep learning algorithms to create realistic animations and speech, enabling users to generate high-quality video content quickly and efficiently.

On April 8, a video with an address purportedly given by CEO “Michael Vanes” was uploaded to the official Maxpread YouTube channel.

Employing The Latest Technology To Fool People

However, the agency asserts that this figure does not exist, and that Jan Gregory, previously the company’s chief marketing officer and corporate brand manager, is in fact Maxpread’s true CEO.

Elizabeth Smith, a DFPI representative, told Forbes in an email that the agency’s enforcement team had traced the avatar’s origins to the online 3D modeling and animation platform Synthesia.io, where it had been given the name “Gary.”

The supposed avatar, who appears to be a middle-aged bald man with a salt-and-pepper beard, rambles on and on in a synthetic voice for the whole of the video’s seven minutes.

In contrast, Harvest Keeper reportedly employed a human actor to perform the role of CEO; despite the company’s claim to use AI to enhance crypto trading profits, it appears the company instead relied on a human boss.

In a statement, DFPI Commissioner Clothilde Hewlett said:

“Scammers are taking advantage of the recent buzz around artificial intelligence to entice investors into bogus schemes.”

Hewlett said they will keep aggressively going after these crypto scammers so that Californians and their investments are safe.

Both organizations have been silent in the face of the accusations. This episode illustrates the need for regulatory monitoring and caution against the misuse of artificial intelligence in the financial sector.

Since these crypto scammers rely on cutting-edge technology to fabricate identities and manipulate data, they are getting ever harder to spot.

As a result, investors need to be extra vigilant and do their due diligence before investing in any crypto project or startup, no matter how promising it may seem at first glance.

-Featured image from ArtemisDiana | iStock / Getty Images Plus