The Securities and Exchange Commission filed fraud charges against seven entities accused of stealing more than $14 million from retail investors through fake cryptocurrency trading platforms and WhatsApp-based investment groups. The scheme operated for roughly one year before federal regulators intervened.
The defendants used social media advertisements and artificial intelligence-themed investment advice to lure victims into depositing funds on platforms that never executed actual trades.
What Happened: Multi-Platform Fraud
The SEC charged Morocoin Tech Corp., Berge Blockchain Technology Co. Ltd., and Cirkor Inc., along with four investment clubs: AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd., and Zenith Asset Tech Foundation. The regulator alleges the companies misappropriated investor funds from Jan. 2024 through Jan. 2025.
According to the complaint, the defendants advertised on social media platforms before directing potential investors to WhatsApp group chats.
Scammers posing as financial professionals shared what they claimed were AI-generated trading recommendations to build credibility with targets.
Victims were then encouraged to open accounts on purported crypto trading platforms operated by Morocoin, Berge, and Cirkor, which falsely claimed to be licensed and government-approved.
The investment clubs promoted fake "Security Token Offerings" supposedly linked to real companies, though no such entities or offerings existed and no actual trading occurred, according to the SEC.
When investors attempted withdrawals, they were allegedly required to pay additional upfront fees. The SEC says all investor funds were transferred overseas through layered bank accounts and crypto wallets.
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Why It Matters: Evolving Tactics
Laura D'Allaird, chief of the SEC's Cyber and Emerging Technologies Unit, described the operation as "a multi-step fraud that attracted victims with ads on social media, built victims' trust in group chats where fraudsters posed as financial professionals and promised profits from AI-generated investment tips, then convinced victims to put their money into fake crypto asset trading platforms where it was misappropriated."
The case highlights how scammers increasingly exploit artificial intelligence technology in cryptocurrency fraud schemes.
Beyond AI-generated investment advice, fraudsters have deployed deepfake videos featuring public figures like Elon Musk to endorse fake investment opportunities, manipulated identity verification systems, and created counterfeit platform interfaces to appear legitimate.
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