On Tuesday, September 29, the U.S. Securities and Exchange Commission (SEC) announced that it has filed lawsuits against four entities in two suspected fraud cases involving the misuse of artificial intelligence (AI) for investment trading.
The SEC stated that Cryptoaiml Ltd., TSAI Pro Ltd., and their respective affiliated foundations used social media platforms such as WhatsApp to gain the trust of investors. They then solicited funds by promising high returns and claiming to be regulated by the SEC, ultimately defrauding over $15.3 million from hundreds of individual investors.
The SEC has filed lawsuits against the mentioned entities in the Southern District of New York federal court.
Cryptoaiml Ltd. and Cryptoaiml Capital Foundation are accused by the SEC of operating WhatsApp groups from August 2024 to March 2025, posing as investment professionals. They would provide trading recommendations purportedly generated by AI, promising high profits, and persuading investors to open accounts on fraudulent trading platforms and transfer cryptocurrencies. Some investors were also deceived into signing management agreements for alleged official investment documents.
The SEC alleges that the platform did not actually engage in any trading activities, and the profits displayed on accounts were purely fictitious. When investors attempted to withdraw funds, they were informed that additional fees had to be paid first, or their accounts would remain frozen. The SEC stated that this case involved the fraudulent obtaining of over $12.5 million.
In another case involving TSAI Pro Ltd. and TSAI Capital Foundation, the SEC accused these two entities of falsely claiming from September 2024 to March 2025 that investors could deposit funds on their platform, lease AI trading robots for guaranteed profits, and earn money by recruiting others.
According to the SEC, the claimed AI trading robots did not exist, and the funds deposited by investors were not used to generate investment returns. This case involved deceiving an amount exceeding $2.8 million.
The defendants in both cases are also accused of impersonating SEC documents to gain investors’ trust. The SEC mentioned that Cryptoaiml displayed tampered Form D registration document screenshots on their website, claiming certification from regulatory authorities. TSAI also exhibited fake SEC certificates and referenced a tampered Form D document, asserting that its operations were fully under SEC regulation. The SEC stated that the Form D filings from these two companies have been removed from the SEC’s website.
David Woodcock, head of the SEC’s enforcement division, stated that though the modus operandi of these two cases differed, their aim was to attract investors with promising returns and a disguise of being under SEC regulation to ultimately steal funds.
According to the SEC’s statement, many victims in both cases are American investors. The fraudsters connected with unsuspecting clients through networking and then proceeded to deceive them financially.
“We encourage the public to use our online reporting platform to report such scams,” said Woodcock.
Bloomberg reported that these investment scams potentially driven by WhatsApp have intensified price fluctuations of small publicly traded companies. In December 2025, the SEC issued a warning cautioning the public about criminals exploiting group chats as an entry point for investment fraud.
WhatsApp has not been accused of any misconduct, and its parent company, Meta Platforms Inc., did not immediately respond to requests for comment.