A certificate bearing the U.S. Securities and Exchange Commission’s name can look reassuring on an investment company’s website. But if you made it yourself, don’t be surprised when the agency makes it an exhibit in a civil complaint.
Perhaps proving that there will always be some new version of a pyramid scheme being perpetrated, the SEC filed a complaint in federal court on September 29, 2026, in the Southern District of New York, against TSAI Pro LTD and TSAI Capital Foundation. The suit accuses TSAI of stealing at least $2.8 million from over 1,700 victims in an investment confidence scam that included artificial intelligence (of course), cryptocurrency (also of course), fictitious profits (well, pretty much fictitious everything), and the tried-and-true favorite of grifters everywhere, the “get money for getting your friends and family to sign up!” scheme.
The SEC alleges that TSAI violated federal securities laws by defrauding investors and offering and selling unregistered securities from September 2024 through March 2025. As part of the alleged scheme, TSAI Pro filed a Form D Notice of Exempt Offering of Securities containing false information, including a claim that the company’s revenue exceeded $100 million.
The SEC wants the court to permanently ban the companies from issuing, buying, offering, or selling securities (even through other companies they control) and order them to give up the money they gained from the alleged scheme, pay interest on that amount, and pay civil fines.
Legal and Safe! (No, Not Really)
Behind the flashy promises of crypto riches, plenty of investors have discovered that “can’t miss” deals can, indeed, miss. The relentless advance of technology has created a bounty of new opportunities for criminals, who can use the internet’s broad access to communication and relative anonymity to devise new ways to swindle victims. In some instances, all it takes is sprucing up an old scheme for the shiny new digital world.
According to the complaint, from September 2024 through March 2025, TSAI promoted its AI trading bot program through its website, Facebook posts, and WhatsApp group chats, promising guaranteed profits. Investors could deposit crypto into their accounts and “rent” AI trading bots to invest on their behalf. They could also earn commissions by recruiting other investors and increase their TSAI “level.” Qualifying group leaders were promised monthly salaries and reduced bot-rental costs, while selected top-level managers were offered stock dividends and a share of annual profits.
As proof of its legitimacy, TSAI proudly claimed it was “fully regulated” by the SEC and “legal and safe,” and displayed a fake certificate purportedly issued by the agency as proof, according to the complaint. Investors would also receive periodic updates about new and improved versions of the AI trading bots and were offered the opportunity to take part in TSAI’s “Profit Box,” which supposedly used a “short-term high-frequency quantitative trading strategy” and promised minimum returns of 0.35% per 24 hours. For those who signed on with TSAI, it all sounded too good to be true.
Which the SEC says it was. Attempts to withdraw “profits” of any type were met with claims of “illegal arbitrage” in the account and, astonishingly, demands that the investors make “verification payments” to prove the account wasn’t compromised. TSAI also imposed “taxes” at rates as high as 25%, threatening to close the account for noncompliance. In mid-March 2025, TSAI declared that the site had been hacked and that all investors were required to make a verification payment ranging from $280 to $12,000 to access their accounts.
By March 23, 2025, the TSAI platform was no longer functional. Although, to be fair, it was never functional as promised. The complaint says the AI trading bots never actually existed, and TSAI was not regulated by the SEC. According to the SEC, the certificate was fake. TSAI Pro’s Form D listed a purported director who had no affiliation with the company and a New York City address where the agency could not locate the business. A separate Form ID submitted to obtain access to the SEC’s filing system allegedly contained a fraudulent notary stamp.
Mess With the Bull (Market), Get the Horns
The SEC’s complaint against TSAI was one of two it filed on September 29, along with charging Cryptoaiml LTD for similar offenses (instead of AI trading bots, Cryptoaiml offered AI-generated trading “signals” for big profits). The suits claim the defendants engaged in schemes that feigned SEC compliance, with the SEC seeking civil penalties for fraud schemes involving the purchase, offering, or sale of securities. The SEC alleges that TSAI knew, or recklessly ignored, that its claims about the nonexistent bots were false.
The SEC says individuals overseas likely operated the entities. According to the TSAI complaint, investor deposits were pooled in consolidation wallets and later moved out. The agency is seeking disgorgement and other civil relief, but recovering the misappropriated funds may prove challenging, since the crypto was moved from the Bitcoin and Ethereum wallets on record.
