The Securities and Exchange Commission filed two complaints on Sept. 29, 2026 in the U.S. District Court for the Southern District of New York against four entities it accuses of investment fraud run through WhatsApp groups and fake trading platforms. The SEC alleges that the two schemes, Cryptoaiml and TSAI, took at least $15 million from retail investors, and that when investors tried to withdraw, they were told their accounts were frozen and that more money was required. The complaints are allegations, and no court has found any defendant liable.
Two complaints, $12.5 million and $2.8 million
In press release 2026-95, the SEC names Cryptoaiml Ltd. and Cryptoaiml Capital Foundation in one case, and TSAI Pro Ltd. and TSAI Capital Foundation in the other, both in the U.S. District Court for the Southern District of New York. The agency alleges that Cryptoaiml misappropriated more than $12.5 million between August 2024 and March 2025, and that TSAI misappropriated about $2.8 million between September 2024 and March 2025. Together the SEC puts the total at at least $15 million, and its release groups both schemes under the description of frauds that used WhatsApp and other platforms.
“Although the methods used to bilk innocent investors in these fraudulent investment scams varied, the goal was the same,” said David Woodcock, director of the SEC’s Division of Enforcement. He said the defendants promised outsized returns, claimed to be legitimate entities regulated by the SEC, “and then steal their money.” Those are the SEC’s characterizations of conduct it must still prove.
How the Cryptoaiml group chats worked, according to the complaint
The Cryptoaiml complaint, case number 1:26-cv-08508, alleges that the defendants ran multiple WhatsApp groups with themed names, posted testimonials from fabricated investors and impersonated real investment professionals sharing supposed AI-generated trading signals with a claimed 98 percent accuracy rate. According to the complaint, investors were then directed to open accounts on a fake trading platform. The SEC says the operation reached at least 300 retail investors and clients across the United States, and it cites losses of $12,512,032, of which $11,998,455 was in crypto assets and $513,577 was in fiat currency.
The release adds that the defendants falsely claimed SEC registration and used forged Form D filings and falsified regulatory certificates to look legitimate. The SEC alleges the Form D filings were fabricated, not real filings.
The frozen-account demand for more money
The withdrawal trap is the part of the case with the most direct consequence for ordinary savers. In the Cryptoaiml complaint, the SEC alleges that defendants told investors who sought to withdraw that their accounts were “locked” or “frozen,” and then directed them to transfer additional funds to “unlock” the accounts. In one instance described in the complaint, an investor was told by a representative of a “Crypto AI Service Center” that he could not withdraw because the SEC and another body were investigating.
The TSAI complaint describes a comparable step. The SEC alleges that TSAI told investors accounts were locked over “suspicion of illegal arbitrage” and demanded “verification payments” ranging from $280 to $12,000, including one message that said “you need to pay 25% tax,” with an exact amount of $1312.5. The press release itself does not give the fee amounts, so those figures come from the complaint.
TSAI’s bot rentals and recruitment tiers
The TSAI complaint alleges a different front end. Investors, it says, were offered “AI-trading bot” programs for rent, from an entry-level bot at a $100 rental fee that promised $20 over two days to a premium bot at $500,000 that purported to return $17,500 a day for 360 days, or $6.3 million. Recruitment commissions were layered on top: 5 percent for directly recruited members, 3 percent and 2 percent for the next two tiers.
The SEC alleges that TSAI misappropriated at least $2.8 million from approximately 1,715 investors. It charges TSAI with violating Sections 5(a), 5(c) and 17(a) of the Securities Act and Section 10(b) of the Exchange Act. The Cryptoaiml defendants face Section 10(b) and Rule 10b-5 claims and Investment Advisers Act claims. In both cases the SEC seeks permanent injunctions, disgorgement with prejudgment interest and civil penalties, along with conduct-based injunctions.
What the regulators’ alerts say about paying to withdraw
Investor.gov, the SEC’s investor-education site, published an alert on Dec. 22, 2025 called Group Chats as a Gateway to Investment Scams. It lists red flags that line up with the complaints: fake “profit” displays that disappear on withdrawal, demands for fees, taxes or deposits to reach funds, false claims that the SEC has frozen an account, and pressure to pay in cash, wire transfers or cryptocurrency. It says investors “should never rely solely on information from group chats.”
FINRA’s alert on investment-group imposter scams, dated Dec. 9, 2025, describes scammers advertising stock groups on social media and moving victims to encrypted chats such as WhatsApp, and says they may promise to “make the money back” if investors transfer more funds. It advises using BrokerCheck to verify professionals and independently researching any recommended investment, and it notes that the FBI reported a 300 percent increase in complaints in July 2025.
The SEC’s two complaints, filed Sept. 29 in the Southern District of New York, are the controlling record for what each defendant is alleged to have done. Each remains an accusation until the court rules.
Where unsolicited pitches find a phone number
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This article was produced with AI assistance and checked against the primary sources linked above.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
