The U.S. Securities and Exchange Commission has filed charges against a network of purported fake cryptocurrency 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 points to remember:
- The SEC has charged fake crypto platforms and AI-branded investment clubs for 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 transactions took place and investors’ funds were diverted and funneled offshore.
In a complaint filed in federal court in Colorado, the SEC named so-called crypto platforms Morocoin Tech Corp., Berge Blockchain Technology Co. Ltd. and Cirkor Inc., as well as 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 trust scam” that relied on advertising on social media, messaging apps and fabricated crypto products.
According to the SEC, the program operated from at least January 2024 to January 2025.
The investment clubs allegedly recruited investors through advertisements on social platforms and then moved the conversations to WhatsApp groups, where the fraudsters posed as financial professionals.
In these discussions, they promoted what was described as AI-generated investment advice to build credibility and trust.
Once investors were engaged, they were asked to open and fund accounts on Morocoin, Berge and Cirkor, which the SEC said falsely claimed to be licensed crypto trading platforms.
The defendants also allegedly offered “security token offerings” presented as being issued by legitimate companies.
In reality, regulators claim that no transactions ever took place, that the platforms were fake, and that neither the token offerings nor their issuing companies existed.
When investors attempted to withdraw funds, the SEC alleges, defendants imposed additional obstacles, including requests for advance fees, further draining victims’ accounts.
In total, at least $14 million was siphoned from U.S.-based retail investors and funneled overseas through a network of bank accounts and crypto wallets, according to the complaint.
“This case highlights an all-too-common form of investment fraud,” said Laura D’Allaird, head of the SEC’s Cyber and Emerging Technologies Unit. She said the case shows how fraudsters use AI-related claims and crypto narratives to target retail investors.
The SEC charged the defendants with violating the antifraud 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 Reduces Crypto Enforcement as Trump Returns to Power
As noted, the SEC has significantly reduced its enforcement activities against the cryptocurrency industry since President Donald Trump returned to office.
Nearly 60% of crypto-related cases have been dropped, suspended or dismissed, even as enforcement measures in traditional financial markets remain largely unchanged.
High-profile cases affected by the takedown include the SEC’s long-running lawsuits against Ripple Labs and Binance.
At the same time, changes at the top of the SEC are expected to further reshape the agency’s position.
Paul Atkins, a Republican candidate seen as more receptive to market-oriented regulation, is expected to remain president for the foreseeable future. However, the commission is about to lose its last Democratic member.
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