SEC Settles GenesisAI Fundraising Case Over $5.3 Million Raised
SEC settles with GenesisAI and former CEO Archil Cheishvili over AI marketplace claims tied to $5.3 million raised from more than 4,000 investors in offerings.
Summary
In Litigation Release No. 26619, the SEC said it filed settled charges on Aug. 26, 2026, against GenesisAI Corp., a formerly Miami-based artificial intelligence startup, and founder and former CEO Archil Cheishvili. The complaint, SEC v. GenesisAI Corp. and Archil Cheishvili, No. 1:26-cv-25837-RKA, was filed in the U.S. District Court for the Southern District of Florida. From December 2019 through December 2024, GenesisAI allegedly raised more than $5.3 million from over 4,000 investors through Regulation Crowdfunding and Regulation A offerings while negligently misrepresenting projected revenue, valuation, customer demand and the viability of its marketplace for AI products and models.
The SEC alleged projections reached $250 million in 2024, valuations exceeded $200 million in 2022, and fundraising materials claimed up to 25 partnerships and a customer waitlist. The marketplace remained in testing until 2022 and never became commercially viable, valuations reflected Cheishvili’s subjective estimates, partnerships were unenforceable and no waitlist existed. Without admitting the allegations, defendants consented, subject to court approval, to permanent injunctions against violating Securities Act Section 17(a)(2). Cheishvili would pay $50,000 disgorgement, $9,184.53 prejudgment interest and a $50,000 civil penalty. Eric E. Morales and Fernando Torres conducted the investigation, assisted by Russell Koonin and supervised by Thierry Olivier Desmet and Stephanie N. Moot of the SEC’s Miami Regional Office, with FINRA assistance.
Positives
- More than $5.3 million raised through Regulation Crowdfunding and Regulation A offerings demonstrated GenesisAI’s ability to attract early-stage capital.
- Over 4,000 investors participated in GenesisAI’s offerings between December 2019 and December 2024.
- Proposed judgments would permanently enjoin both defendants from violating Securities Act Section 17(a)(2), subject to court approval.
- Cheishvili consented to $109,184.53 in disgorgement, prejudgment interest and civil penalties without admitting the SEC’s allegations.
- FINRA assisted the SEC investigation, adding regulatory coordination to the review of GenesisAI’s offerings.
Risks & concerns
- The SEC alleged GenesisAI negligently used revenue projections reaching $250 million by 2024 without a reasonable basis.
- GenesisAI’s AI marketplace remained in testing until 2022 and never became commercially viable, according to the complaint.
- Valuations exceeding $200 million in 2022 allegedly rested on Cheishvili’s subjective estimates rather than an objective foundation.
- Claims of up to 25 partnerships allegedly involved unenforceable arrangements, while the advertised customer waitlist did not exist.
- More than 4,000 investors committed over $5.3 million while receiving allegedly misleading financial and demand claims.
- The settlement remains subject to approval by the U.S. District Court for the Southern District of Florida.