SEC Charges Cryptoaiml and TSAI Entities Over $15 Million Fraud

The Securities and Exchange Commission on 29 september 2026 announced fraud charges against Cryptoaiml Ltd., Cryptoaiml Capital Foundation, TSAI Pro Ltd., and TSAI Capital Foundation, entities the agency said are likely operated by individuals located overseas, accusing them of defrauding hundreds of retail investors, including many in the U.S., through so-called investment confidence scams. In two separate complaints, both filed in the U.S. District Court for the Southern District of New York, the SEC alleged the schemes feigned SEC compliance while misappropriating more than $12.5 million and $2.8 million, respectively, from investors through online platforms.

“Although the methods used to bilk innocent investors in these fraudulent investment scams varied, the goal was the same – promise potential investors outsized returns, claim that they were legitimate entities regulated by the SEC, and then steal their money,” said David Woodcock, Director of the SEC’s Division of Enforcement, who encouraged the public to report such schemes through the agency’s online tip portal. The SEC’s Office of Investor Education and Assistance has issued investor alerts warning that fraudsters may use popular group chats or claim to be officially registered with the SEC, and the agency urged investors to use Investor.gov to check the background of anyone offering or selling them an investment. Separately, the Forms D filed by Cryptoaiml Ltd. and TSAI Pro Ltd. have been removed from the Commission website.

Cryptoaiml Allegations

According to the SEC’s complaint against Cryptoaiml Ltd. and Cryptoaiml Capital Foundation (Case No. 1:26-cv-08508), from at least augustus 2024 through maart 2025 the defendants formed WhatsApp group chats purportedly run by experienced investment professionals, issued supposed AI-generated trading signals, and directed investors to open accounts on a purported crypto asset trading platform. The complaint alleges the platform was not a genuine trading platform, no trading took place, and reflected profits were fictitious, and that investors who attempted to withdraw funds were told their accounts were frozen until they paid advance fees.

Cryptoaiml Ltd. is a New York corporation incorporated on 28 augustus 2024, with a claimed principal place of business at 66 Hudson Boulevard East in New York, and Cryptoaiml Capital Foundation is a Colorado nonprofit corporation formed on 24 augustus 2024, that registered as a Money Services Business with the Financial Crimes Enforcement Network on 20 augustus 2024. The complaint states both are owned and controlled by persons unknown. On 3 september 2024, Cryptoaiml Ltd. filed a Form D with the SEC claiming revenue of over $100 million and $10 million raised and naming a James Peat as executive officer, director, and promoter; the SEC alleges the signer does not appear to exist, the notarization of the signature appears to have been forged, and the contact information supplied to the SEC’s EDGAR system was false.

The cryptoaiml.vip website displayed tabs labeled SEC and MSB showing the Form D and the MSB registration and claimed more than 1 million users, more than 190 supported countries, and more than $207 billion in quarterly trading volume, along with a 1:1 reserve ratio for user assets, offline multi-signature cold storage, and a user protection fund, according to the complaint. In the WhatsApp chats, the defendants impersonated real investment professionals, including one purportedly affiliated with Raymond James & Associates, Inc. and another identified as the president of Citadel Securities LLC, with biographical details copied from the actual president’s biography on Citadel Securities’ public website. The complaint states that none of the real professionals or their firms had any involvement with the defendants or authorized the use of their names. The chats boasted a 98% accuracy rate for the AI-generated signals, promoted up to 1,600% profit in 60 days, offered a VIP program under which the purported firm would bear up to 90% of trading risks and compensate any losses, and carried fabricated testimonials from impersonated investors.

The defendants also sent investment management agreements to certain clients, at least two of whom signed agreements providing for management and performance fees, the complaint alleges. One agreement designated Cryptoaiml Venture Capital Management Group as manager and included a fee schedule under which the adviser would not charge a fee as long as profits were 1,200% per month or more; another identified the investment manager as an investment holding company of Raymond James & Associates and directed clients to the SEC’s public adviser-information website, where a search would have returned the real investment adviser representative and SEC-registered investment adviser. Some investors sold securities from stock portfolios or 401(k) accounts to fund their platform accounts or to meet the defendants’ fee demands, the complaint alleges.

The SEC alleges the Cryptoaiml defendants misappropriated approximately $12,512,032 in crypto assets and fiat currency from at least 300 investors. Four primary crypto wallet addresses associated with the platform received $11,998,455 in crypto assets, and approximately $513,577 in fiat currency came from four investors and clients who transferred funds to unlock their accounts or were otherwise given false reasons to advance more money. Those fiat funds were wired to U.S. bank accounts held in the names of Flavyo Trading Corporation, Neurotech IT Solutions Inc., INTY Endless LLC, and a sole proprietorship called Enjoy Time, which the defendants described to investors as market makers, cooperative suppliers, or crypto firms holding large quantities of crypto assets. Funds deposited into the Flavyo and Neurotech accounts were then wired to accounts in the names of King Cloud Information Technology Consultants Est and Summit Information Technology Consultants Est, both entities formed in the United Arab Emirates, while funds deposited into the INTY and Enjoy Time accounts were commingled and wired to U.S.-based accounts held in the names of Chinese companies Global Transline Services Co. Ltd. and Guangzhou Yanjin Trading Co. Ltd., the complaint alleges.

The Cryptoaiml complaint charges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and Sections 206(1) and (2) of the Investment Advisers Act of 1940. The SEC seeks permanent injunctions, a conduct-based injunction permanently barring each defendant from acting as or being associated with any investment adviser, disgorgement of ill-gotten gains with prejudgment interest, and civil monetary penalties, and it demands a jury trial.

TSAI Allegations

The SEC’s complaint against TSAI Pro Ltd. and TSAI Capital Foundation (a/k/a TSAI Exchange Ltd.) (Case No. 1:26-cv-08518) alleges that from september 2024 to maart 2025 the defendants offered an AI Trading Bot Program through the techstarvoip.com website, WhatsApp group chats, and public Facebook posts, representing that investors could earn guaranteed profits by depositing funds to rent bots purportedly programmed with artificial intelligence to trade on their behalf. An entry-level bot carried a $100 rental fee and purported to pay $10 per day over two days plus return of the fee; the most expensive bot carried a $500,000 rental fee and purported to pay $17,500 per day for 360 days, for a total of $6.3 million. Investors deposited BTC, ETH, USDT, and USDC into wallet addresses the defendants designated.

The program also paid investors to recruit others, the complaint alleges, with commissions of 5% on directly recruited members and 3% and 2% on indirect recruits, investor levels ranging from S0 to S7 based on recruiting and investment totals, and promised monthly salaries for group leaders at the S1 level or above for three years. A 20 maart 2025 WhatsApp post promised stock dividends to the top 100 S7-level managers and salary increases from $50,000 to $100,000 for the other top 300 S7-level managers. A Profit Box feature promised a minimum return of 0.35% per 24 hours through what the website described as a short-term high-frequency quantitative trading strategy.

TSAI Pro, a New York corporation listing a principal place of business at 250 Greenwich Street in New York, filed a Form D on 23 september 2024, claiming revenue of over $100 million and disclosing a purported exempt indefinite offering under Rule 506(c) of Regulation D with a $1,000 minimum investment, the complaint states. The TSAI website linked to a certificate purportedly issued by the SEC that referenced the Form D, and the defendants represented that TSAI was fully regulated by the SEC. The SEC alleges the certificate was not issued by the agency and was a false and fraudulent document, that the Form D listed a director named Benjamin Douglas Cook who is not actually affiliated with TSAI Pro, that the Form ID used to obtain SEC filing access contained a fraudulent notary stamp, and that the SEC could not locate a business named TSAI Pro at the claimed address. TSAI Capital Foundation, a Colorado corporation purportedly headquartered in Denver, registered as a Money Services Business with FinCEN on 5 augustus 2024.

The complaint alleges the entire program was a sham: there were no AI trading bots, no trading took place on investors’ behalf, and the profits shown in investor accounts were fake. Investors who sought withdrawals were blocked with excuses that included suspicion of illegal arbitrage, requirements to re-deposit previously withdrawn funds, demands to pay a 25% tax, and verification payments of $280 to $12,000 imposed under the guise that the platform had been hacked. One investor was told in mid-maart 2025 that a 25% tax of $1,312.50 applied to a $5,250 account balance and that the account would be temporarily closed if the tax was not paid, the complaint alleges. By 23 maart 2025, the website no longer functioned and displayed only a message that it was under maintenance. The SEC alleges the TSAI defendants misappropriated at least $2.8 million in crypto assets from approximately 1,715 retail investors, with approximately $2.7 million deposited on the Bitcoin blockchain and the remainder on the Ethereum blockchain, pooled into consolidation wallets from which the defendants subsequently removed the funds.

The TSAI complaint charges violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act and Rule 10b-5, alleging the AI Trading Bot Program was offered and sold as an unregistered investment-contract security, with investor funds pooled and profits promised from the defendants’ purported managerial and entrepreneurial efforts. The SEC seeks permanent injunctions, a conduct-based injunction permanently barring each defendant from participating in the issuance, purchase, offer, or sale of any security, disgorgement with prejudgment interest, and civil monetary penalties, and it demands a jury trial on liability.

Both complaints were dated 29 september 2026, and signed by Ruth C. Pinkel of the SEC’s Los Angeles Regional Office, with a pro hac vice application noted as pending.