The U.S. Securities and Exchange Commission (SEC) charged four entities in two separate civil cases over alleged cryptocurrency and artificial-intelligence investment scams that collectively misappropriated more than $15 million from retail investors.
According to an official release on Tuesday, the SEC said the schemes used online platforms, including WhatsApp, to establish relationships with potential investors and promote purported crypto or AI-based investment opportunities. The agency alleges the entities also falsely claimed to be regulated or registered with the SEC.
The two complaints, filed September 29 in the U.S. District Court for the Southern District of New York, target Cryptoaiml Ltd. and Cryptoaiml Capital Foundation in one case and TSAI Pro Ltd. and TSAI Capital Foundation in the other. The SEC alleges the Cryptoaiml entities took more than $12.5 million from more than 300 retail investors, while the TSAI entities allegedly misappropriated at least $2.8 million from about 1,715 investors.
Cryptoaiml allegedly used WhatsApp to recruit investors
According to the SEC complaint, the Cryptoaiml scheme operated from at least August 2024 through March 2025. The entities allegedly created WhatsApp groups in which individuals impersonated investment professionals and distributed purported AI-generated trading signals. The signals were presented as capable of producing large profits, with one alleged representation claiming a 98% accuracy rate.
Investors were then directed to a purported trading platform and encouraged to transfer crypto assets into their accounts. The SEC alleges that some investors were also presented with investment management agreements that appeared to establish legitimate adviser relationships.
The entities allegedly claimed to have regulatory credentials, including SEC certification. The SEC said the Cryptoaiml website displayed a falsified Form D filing as part of those representations.
The complaint alleges that no actual trading occurred and that profits displayed on the platform were fabricated. When investors sought to withdraw their funds, they were allegedly told that their accounts had been frozen and that additional payments were required before withdrawals could be processed.
TSAI case centers on fake AI trading bots
The second SEC complaint involves TSAI Pro Ltd. and TSAI Capital Foundation, which allegedly operated the scheme from September 2024 through March 2025. The SEC alleges the entities promoted an AI trading-bot program through their website, WhatsApp conversations, and Facebook. Investors were told they could earn returns by paying to rent artificial-intelligence trading bots.
The alleged rental fees ranged from $100 to $500,000. The scheme also offered referral payments for bringing in additional investors, according to the SEC. The agency alleges that TSAI falsely claimed to be regulated by the SEC and displayed a forged SEC certificate referencing a falsified Form D filing.
The complaint alleges there were no AI trading bots and that investor deposits were not used to generate trading returns. Instead, the SEC said crypto deposits, including BTC, ETH, USDT, and USDC, were pooled into consolidation wallets.
When investors attempted to withdraw funds, the defendants allegedly demanded additional payments described as verification fees or taxes. The website was subsequently taken offline in March 2025, according to the complaint.
SEC alleges more than $15 million was misappropriated
The two cases involve different numbers of alleged victims and different methods of soliciting funds.
| Case | Alleged funds | Investors | Main pitch |
|---|---|---|---|
| Cryptoaiml | More than $12.5M | 300+ | AI trading signals and investment management |
| TSAI | At least $2.8M | About 1,715 | AI trading bots and referral-based returns |
| Combined | More than $15.3M | 2,000+ | Crypto and AI investment schemes |
The SEC said both groups used representations about regulatory status to establish credibility with potential investors.
The agency is seeking permanent injunctions, disgorgement with prejudgment interest, and civil monetary penalties in both cases. The SEC is also seeking conduct-based restrictions against the defendants under the relevant securities laws.
SEC warns against fake registration claims
The enforcement actions also highlight the use of false regulatory credentials in online investment scams.
The SEC’s Office of Investor Education and Assistance has previously warned that fraudsters can use group chats and false claims of SEC registration to attract investors. The agency advises investors to use Investor.gov to check the background and registration status of people and firms offering investments.
The SEC’s enforcement director, David Woodcock, said the schemes varied in method but allegedly relied on promises of high returns and false claims of regulatory legitimacy before taking investors’ funds.
SEC targets broader use of false adviser filings
The cases follow a broader SEC enforcement action announced in August against 38 entities accused of using false or misleading Form ADV filings to appear legitimate and attract retail investors. The agency said the entities filed fabricated information between 2025 and 2026 and falsely presented themselves as Exempt Reporting Advisers.
The SEC said the firms exploited the reporting framework for Exempt Reporting Advisers, which generally applies to advisers that meet specific exemptions from SEC registration, to create an appearance of regulatory credibility. The agency alleged that this information was then used to lure retail investors into fraudulent schemes.
The August action underscores the SEC’s broader scrutiny of schemes that misuse its filing system or regulatory status to establish credibility with prospective investors.
The complaints are civil enforcement actions, and the defendants’ alleged conduct has not been adjudicated.
The SEC charged Cryptoaiml and its associated foundation with violations including Section 10(b) of the Exchange Act, Rule 10b-5, and provisions of the Investment Advisers Act. The TSAI entities face allegations under Sections 5 and 17(a) of the Securities Act and Section 10(b) and Rule 10b-5 of the Exchange Act.
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