US Regulators Declare YieldTrust.ai a Ponzi Scheme and Ban the Platform
Several US states’ financial regulators have issued a warning that the YieldTrust.ai trading platform exhibits characteristics of a Ponzi scheme and banned the application in their states.
YieldTrust.ai and its founder, Stefan Ciopraga, have been accused of fraud by regulators in Montana, Texas, and Alabama.
YieldBot, the trading decentralized application’s developers, claimed to use advanced artificial intelligence for their trading bot, which they say can make 70 times more transactions and 25 times more profits than any trader.
However, regulators emphasized that there is no evidence of such profitability, nor the actual existence of the trading bot.
The regulators have hired a third-party firm to audit the YieldBot smart contracts running on the BNB Smart Chain.
The auditors report that the smart contracts are dangerous, as the developers have significant control over user funds and can block asset withdrawals.
YieldTrust.ai promised up to 2.2% per day, but there is no evidence of this either. Montana Securities Commission imposed a ban on YieldTrust.ai and a $100,000 fine.
YieldTrust.ai stopped the application immediately and deleted their Twitter account, but it is unknown if the users of the platform were able to withdraw their funds.
Harvest Keeper, another AI-based DApp, was recently reported to have fled with user assets.