SEC Charges Two Firms With $15M WhatsApp, Crypto Frauds
The Securities and Exchange Commission suspects several business entities are fronts for dual international fraud schemes that bilked at least $15 million from investors via WhatsApp and other social media platforms.
The complaints against Cryptoaiml and TSAI were filed in New York federal court, accusing the companies of schemes that falsely told investors they were in regulatory compliance while stealing at least $12.5 million and $2.8 million, respectively.
“Although the methods used to bilk innocent investors in these fraudulent investment scams varied, the goal was the same—promise potential investors outside returns, claim that they were legitimate entities regulated by the SEC, and then steal their money,” SEC Enforcement Division Director David Woodcock said about the charges.
According to the Cyptoaiml complaint, the company filed a Form D with the commission, but falsified the information on it. Starting in August 2024, the company created WhatsApp group chats to interact with investors, while purporting to be “experienced investment professionals.”
In some cases, the defendants forged an advisor/client relationship with investors who signed agreements they believed were legitimate. On the platform, they claimed to be actual investment professionals; those individuals had no idea they were being impersonated, according to the complaint.
In one case, the fraudsters claimed to be the president of Citadel Securities (though the current president, Jim Esposito, is unnamed in the description). In another instance, they identified one advisor as an investment holding company of Raymond James as their investment manager (which was not the case).
At this point, the company urged investors to open “trading” accounts on what it claimed was its crypto asset trading platform. Once doing so, the company provided investors with purported artificial intelligence-generated trading “signals,” or tips it claimed would boost investors’ trading profits.
While clients were able to log in to their “accounts” on the platform (which showed supposed profits), the platform wasn’t real, and no trading ever took place. According to the commission, the platform was a vehicle for stealing clients’ funds, with the fraudsters boosting their gains by demanding that clients seeking to withdraw money from their accounts pay advance fees.
The defendants also claimed they ran a “safe” platform overseen by regulators, including the SEC, which was not the case.
According to the TSAI complaint, between September 2024 and March 2025, the entities solicited investors through their website, WhatsApp and public Facebook chats, claiming they could earn guaranteed profits.
TSAI allegedly claimed they’d use client funds to “rent” bots they programmed using AI to trade on behalf of clients, and told investors they could earn income by recruiting others to invest in the AI Trading Bot Program (which they offered and sold as an investment contract). As with Cryptoaiml, TSAI allegedly told investors it was “fully regulated” by the SEC and safe to use.
“But nothing about the TSAI platform or the program was real, legal, or safe: there were no AI trading bots and deposited funds were never used to earn returns for investors,” the complaint read. “The purported profits and income reflected in investors’ accounts on the TSAI Platform were fake.”
According to the commission, the falsified Forms D for both Cryptoaiml and TSAI have been removed from the agency’s website. In both cases, they’re urging the court to enjoin the companies from operating in the space and to order disgorgement and civil penalties.
