The US Securities and Exchange Commission has filed charges against a network of alleged fake crypto trading platforms and so-called AI investment clubs, accusing them of running a coordinated scheme that defrauded retail investors of more than $14 million.
Key Takeaways:
The SEC charged fake crypto platforms and AI-branded investment clubs over a $14 million retail investor scam. Fraudsters allegedly used social media ads and WhatsApp groups to promote fake AI trading tips and platforms. Regulators say no real trading occurred, and investor funds were misappropriated and routed overseas.In a complaint filed in federal court in Colorado, the SEC named purported crypto platforms Morocoin Tech Corp., Berge Blockchain Technology Co. Ltd. and Cirkor Inc., along with investment clubs AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd. and Zenith Asset Tech Foundation.
Regulators allege the entities worked together in an “investment confidence scam” that relied on social media advertising, messaging apps and fabricated crypto products.
SEC: AI-Themed Crypto Scam Lured Investors Through Social Media and WhatsApp
According to the SEC, the scheme operated from at least January 2024 through January 2025.
The investment clubs allegedly recruited investors through ads on social platforms and then moved conversations to WhatsApp groups, where fraudsters posed as financial professionals.
In those chats, they promoted what were described as AI-generated investment tips to build credibility and trust.
Once investors were engaged, they were directed to open and fund accounts on Morocoin, Berge and Cirkor, which the SEC says falsely claimed to be licensed crypto trading platforms.
The defendants also allegedly offered “security token offerings” that were presented as being issued by legitimate companies.
In reality, regulators say no trading ever occurred, the platforms were fake, and neither the token offerings nor their issuing companies existed.
When investors attempted to withdraw funds, the SEC alleges the defendants imposed additional hurdles, including demands for advance fees, further draining victims’ accounts.
In total, at least $14 million was misappropriated from US-based retail investors and routed overseas through a network of bank accounts and crypto wallets, according to the complaint.
“This matter highlights an all-too-common form of investment scam,” said Laura D’Allaird, chief of the SEC’s Cyber and Emerging Technologies Unit. She said the case shows how fraudsters are using AI-related claims and crypto narratives to target retail investors.
The SEC charged the defendants with violating anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The agency is seeking permanent injunctions, civil penalties and disgorgement with interest.
SEC Scales Back Crypto Enforcement as Trump Returns to Office
As reported, the SEC has significantly reduced its enforcement activity against the cryptocurrency industry since President Donald Trump returned to office.
Nearly 60% of crypto-related cases have been dropped, paused or dismissed, even as enforcement actions in traditional financial markets continue largely unchanged.
High-profile cases affected by the pullback include the SEC’s long-running lawsuits against Ripple Labs and Binance.
At the same time, changes at the top of the SEC are set to further reshape the agency’s stance.
Paul Atkins, a Republican appointee seen as more receptive to market-driven regulation, is expected to remain chair for the foreseeable future. However, the commission is preparing to lose its final Democratic member.
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