protos.com
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.