The Texas State Securities Board and several other agenciessent a notice of possible sanctions to Charlie Karagachanu and related entities concerning the promotion of TruthGPT Coin and Elon Musk AI Token.
Regulators intend to stamp out a ‘fraudulent scheme involving investment contracts exploiting AI hype’.
TruthGPT Coin is positioned as a token that uses an AI system named Elon Musk AI. It is claimed that the model can analyse a wide range of digital assets, forecast future cryptocurrency prices and distinguish profitable investments from fraudulent ones.
The organizers promise that the price of TruthGPT Coin ‘could rise ten-thousandfold’.
Investors are being duped with claims of support for the project from Elon Musk. Animated avatars and images of the billionaire are used for this purpose.
The promotion also claims approval of TruthGPT Coin by many industry figures, including Binance CEO Changpeng Zhao and Ethereum co-founder Vitalik Buterin.
“Organizers craft schemes that create the appearance that they have developed sophisticated AI platforms. In fact, this is simple fraud,” — said the Texas Securities Commissioner Travis Ailes.
The director of supervisory affairs at the State Board, Joe Rotonda, advised investors to stay vigilant and, ‘setting aside emotions, objectively evaluate each proposition — especially when it is presented by an unknown person online’.
In 2022, cryptocurrency investors invested $4.6 billion in the purchase of 9,900 tokens on the BNB Smart Chain and Ethereum networks, allegedly part of the Pump & Dump schemes.