SEC Charges Multiple Entities in Fraud Schemes Totaling at Least $15 Million That Used WhatsApp and Other Platforms to Lure Investors

The Securities and Exchange Commission (SEC) has charged multiple entities, potentially operated by individuals overseas, for defrauding hundreds of investors, including many in the U.S., through investment confidence scams. According to two separate complaints filed in U.S. District Court for the Southern District of New York, the SEC accused Cryptoaiml Ltd. and Cryptoaiml Capital Foundation, as well as TSAI Pro Ltd. and TSAI Capital Foundation, of fraud in connection with schemes that pretended to comply with SEC regulations while misappropriating over $12.5 million and $2.8 million, respectively, from investors through online platforms.

The SEC alleges that these entities used various methods to lure investors, promising them substantial returns and claiming to be legitimate, regulated entities. They created WhatsApp group chats to gain investor trust by posing as investment professionals and disseminating supposed AI-generated "signals" or tips claiming to generate large profits.

The defendants allegedly directed investors to open accounts on their fake trading platforms and manipulated them into transferring crypto assets to these platforms. In some cases, they established investment adviser-client relationships with unsuspecting investors, who signed management agreements purportedly representing them as legitimate.

The SEC also claims that the defendants falsely represented themselves as certified by regulators, including the SEC, by posting screenshots of falsified Form D filings with the SEC on their websites. Additionally, the entities allegedly misrepresented their involvement in AI-trading bot programs, falsely claiming they were regulated by the SEC and posting falsified certificates on their websites.

These programs were entirely fraudulent, with no AI trading bots and no actual earnings for investors. Instead, deposited funds were stolen by the defendants. The SEC's Office of Investor Education and Assistance has issued alerts warning investors about fraudsters using popular group chats and falsely claiming SEC registration to lure them into scams.