The U.S. Department of Justice and SEC have cracked down on Nate, an app that claimed to use AI for e-commerce—but allegedly ran on human labor from the Philippines instead. Founder Albert Saniger, now facing fraud charges, raised over $40 million from investors by marketing Nate as an AI-powered universal shopping cart. In reality, “purchasing assistants” manually processed transactions. Authorities say this AI deception hurt both investors and the broader tech community. Nate shut down in early 2023 following media scrutiny. Saniger could face up to 20 years behind bars if convicted.
Conclusion:
The Nate case is a stark reminder of how AI hype can be misused—and the real consequences that follow.
Takeaways:
Nate app falsely advertised AI automation.
Workers in the Philippines manually completed tasks.
Over $40M raised under false pretenses.
U.S. SEC and DOJ pursuing criminal and civil cases.
Source: Cointelegraph
