While many crypto influencers are busy celebrating the dawn of AI-led digital assets and AI-managed hedge funds, their more observant counterparts have noticed that many of the most mundane tasks earmarked to be carried out by AI bots actually require human intervention.

Indeed, on Monday, crypto’s pre-eminent AI ‘bot’ — which received unbridled praise from supposed luminaries like Arthur Hayes after it led the memecoin GOAT to an $800 million market capitalization — couldn’t even launch a website.

According to Andy Ayrey, the crypto-trading AI bot he coded, Terminal of Truths, created a website and co-registered a domain name for memecoin Goatseus Maximus (GOAT). However, the bot didn’t do any of this.

AI bot needs human to call customer support

The bot allegedly tried to register a domain name for the GOAT website via GoDaddy using Ayrey’s 2-factor authentication procedures. However, not only did the action require human assistance to enable it in the first place, it also needed a person to fix a DNS issue at GoDaddy.

Worse still, before a human arrived to save the day, a hacker apparently stole Terminal of Truths’ website and used it to steal money from unsuspecting victims lured by the bot’s marketing.

Read more: Marc Andreessen’s crypto-trading AI breakthrough is human-operated

It wasn’t the first time that this particular project has suffered an attack. After endorsements from a co-founder of Andreessen Horowitz, Ayrey claims he lost access to his X account on October 28. A hacker then managed to attract $400,000 in crypto purchases into a scam posted to his account. 

After so many dubious statements about an ostensibly AI-trading and coin-creating bot that hasn’t technically accomplished those actions, some people were skeptical that Ayrey actually lost access to his X account.

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A new platform modeled after the degenerate Solana meme coin platform Pump.fun has the crypto community buzzing about the dawn of AI-managed hedge funds. In reality, humans are behind everything, including its first proof-of-concept: the purposefully misspelled ai16z fund endorsed by a real co-founder of a16z.

Analogous to greenwashing adding a veneer of ecological responsibility to an organization’s public image, AI-washing is spraying crypto projects with superficial sophistication. Although AI-branded altcoins have proliferated for months, this month’s debut of AI crypto trading funds suggests the trend is far from over.

Truth_Terminal kicked off this latest iteration of AI-washed marketing. Its owner kept his human decision-making quiet as he and venture capitalist Marc Andreessen encouraged public celebration of his non-existent AI-managed trades. 

Spotting success in misleading the public about the supposed advent of market-beating AI traders, Andreessen has now promoted a platform for creating AI hedge funds. Seemingly cloned from the Solana meme coin generator Pump.fun — that has always hidden its 99.99% failure rate — Daos.fun is a kickstarter for ‘AI-managed’ funds that are not actually managed by AIs.

In reality, humans trade meme coins with users’ funds instead.

Bleak descriptions of AI-managed crypto funds

Descriptions for supposed AI hedge fund managers are as dystopian as they are sardonic. The Daos.fun fund that Andreessen endorsed claims to be an “AI VC fund, fully managed by Marc AIndreessen,” the purposefully misspelled “greatest living VC.”

A fund entitled “Gaza Relief Fund” admits in fine print that “none of these funds are going to Gaza lol,” which is supposedly funny. Another misspelled fund, Sequoai Capital, “may or may not use AI to help make calculated bets.”

Comments from believers duly poured in. “First AI agent running a fund by itself,” chanted one user. “An AI agent that will trade on its own,” cheered another. Claims of “the first memecoin fund fully run by an AI agent” earned tens of thousands of views.

Of course, no fund on Daos.fun is actually operated by an AI. The creator and owner of ai16z is a non-AI human named Shaw. Truth_Terminal relies on the human discretion of Andy Ayrey who controls its funds, and no AI created or traded the GOAT memecoin as many were led to believe.

Daos.fun is careful to never claim that AI agents actually own or control any funds.

Even the largest AI-washed fund on the platform, ai16z, has lost two-thirds of its assets since yesterday. Briefly peaking around $96 million, investors in the AI-branded fund realized that most of its assets were its human creator’s own token, Shaw’s Degen Spartan AI token. The fund’s assets have fallen to $37 million as of publication time.

Read more: OpenAI tool used to create voice bot that can drain crypto wallets

AI-washing and regulatory obligations

Promoters of financial products like trading funds have immense legal obligations, may not promote securities offerings without filing public disclosures, may not transact with sanctioned entities, and have advertising, registration, and compliance obligations. 

Anyone who manages money on behalf of others in the US must adhere to fiduciary standards and strict regulatory requirements, including recordkeeping, licensure, and disclosure obligations.

As such, claiming that an AI agent somehow manages the funds even though a human controls the private keys of its crypto wallet is a gamble of wordplay.

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Tech billionaire Marc Andreessen is tipped to follow PayPal co-founder Peter Thiel in leaving Meta’s board of directors after investing billions in rival web3 projects.

Business Insider relayed sentiment of sources close to the company who say Andreessen’s tenure could be under threat due to the work of his venture capital firm, Andreessen Horowitz (a16z).

Andreessen is currently the longest-serving Meta (formerly Facebook) board member, having been appointed in 2008.

Over the past year, a16z has plowed a fortune into virtually every kind of web3 project, including Bored Apes’ Yuga Labs, Sam Altman’s dystopian Worldcoin, and “climate neutral” blockchain project NEAR Protocol.

A16z finished raising $2.2 billion for its third crypto fund last July and plans to amass $4.5 billion for its next vehicle expected to debut in the next few months. If it succeeds, it would be the biggest crypto venture fund to date.

Meta has plans for its own web3 projects and Andreessen’s continued investment in potential competitors is supposedly not a good look.

The Zuckerberg-led tech giant announced last month that Thiel would give up his place on the company’s board later this year to “devote his time to other interests.”

As Business Insider noted, Thiel’s time at Meta was marked by a number of controversies, including his vocal support for former US President Donald Trump.

He also raised eyebrows with his suggestion that Meta should carry on with its policy of not fact-checking ads from politicians in 2019.

Meta’s nine-member board is up for re-election in May.

Meta braindrains to a16z startups

Conflicts of interest between companies and their board members’ other projects aren’t uncommon. But according to cited sources, Andreessen’s other investments are becoming thorns in Meta’s side.

Last October, two of Facebook’s top tech brains jumped ship to Andreessen Horowitz’s crypto team.

In December, the company led a $36 million funding round in support of Mysten Labs, a blockchain infrastructure startup founded by four former Facebook engineers.

Andreessen Horowitz insiders have even thrown shade at Meta for its metaverse and web3 ambitions. Speaking this week after a16z led a $450-million funding round in Yuga Labs, a16z’s crypto head Chris Dixon told The Verge:

“To me, Yuga Labs, combined with these other emerging web3 companies, are an important counterweight to companies like Meta.”

Read more: [Web3 crypto startups poach top execs from Facebook, YouTube, Amazon]

“There’s a dystopian future where Meta is this kind of dominant digital experience provider, and all of the money and control goes to that company,” added Dixon.

For the record, a16z says there’s nothing in the rumors of Andreessen leaving Meta, telling Business Insider: “If he were to step down, he doesn’t know about it. So no, it’s not happening. At least not now.”

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