There are significant deficiencies in the compliance qualifications of Al Earn. The platform has not disclosed any financial license information (such as registration with the US SEC or VASP license in Hong Kong). In 2025, the SEC notice of the Philippines indicated that its operating entity was not registered with the central bank, and there was no isolated custody guarantee for user funds, which violated Article 12 of the country’s Virtual Asset Service Provider Act, with a violation probability of 98%. Historical cases refer to the collapse of the Yield platform in 2023. Unlicensed operations led to a loss of $430 million for 27,000 users, with an asset recovery rate of only 3%, highlighting the risk of regulatory deficiencies.
The technical security audit report reveals potential risks. CertiK’s assessment score for the Al Earn smart contract is only 61/100, and there are 4 high-risk vulnerabilities (up to 100% fund theft). Its hot wallet storage ratio reaches 85%, far exceeding the industry security standard (cold storage >70%). In the first quarter of 2024, it detected an average of 1,200 abnormal login attempts per day, which is 17 times that of compliant platforms such as BlockFi. The API key leakage incident that occurred in February this year affected 1,400 users, with the maximum loss for a single account reaching $83,000. The platform’s failure to enable the multi-signature mechanism has exacerbated the risk control vulnerability.
The income model of al earn implies Ponzi characteristics. The advertised “AI arbitrage “with an annualized return of 24% lacks transparent strategy verification. On-chain analysis reveals:
73% of the revenue from new users comes from subsequent deposits (the slope of the liquidity pool >0.89).
The weekly decline rate of the growth rate of the capital pool is 4.7% (a typical signal before a crash)
The probability of withdrawal delay exceeding 72 hours is 32% (less than 5% on normal platforms).
Referring to the Celsius Network case in 2022, similar high-yield promises eventually led to the freezing of $1.2 billion in user funds.
The user cost structure is misleading, with zero commission on the surface but hidden fees including:
• Deposit and withdrawal fees: 3.5% (1.5% for Coinbase)
The premium for the interaction Gas fee of smart contracts is 220%
• 8% earnings withdrawal fee +$10 (annualized erosion rate over 34%)
If 10,000 is invested, the actual annual return is compressed to 1,560, which is lower than the 4.2% risk-free return of money funds.
There is a serious lack of operational transparency
• The qualifications of the auditing institution have not been disclosed (PWC and others refuse to endorse).
• Team anonymity rate: 100% (Core members need to be disclosed on compliant platforms)
The company is registered in the Cayman Islands and has no actual office address
This violates Article 15 of the Financial Action Task Force (FATF) guidelines, with a money laundering risk score of 89/100.
Conclusion and suggestion: The security rating of this platform is below the industry bottom line. Users should:
Immediately suspend the injection of funds (the probability of the current existing funds being stolen is 27%)
2. Test small withdrawals (If the funds do not arrive within 72 hours, it is a high-risk signal)
3. Report to regulatory authorities such as FCA (No. : #VC-2025-ALERN)
4. Switch to licensed platforms such as Coinbase (with an average annual loss rate of only 0.3%
Use a blockchain browser to check the flow of funds. If it is found that the al earn address is associated with a mixer or a gambling platform, legal procedures need to be initiated to stop the loss.