The SEC moved swiftly against alleged crypto fraud, accusing multiple trading platforms and investment clubs of orchestrating a multimillion-dollar scheme that lured retail investors through social media, messaging apps and fake AI-driven trading promises.
SEC Alleges Social Media Crypto Scam Targeted US Retail Investors
The U.S. Securities and Exchange Commission (SEC) on Dec. 22 announced charges against three purported crypto asset trading platforms and four investment clubs, alleging a wide-ranging fraud scheme that targeted retail investors through social media promotions and messaging apps.
The chief of the SEC’s Cyber and Emerging Technologies Unit, Laura D’Allaird, said: “This matter highlights an all-too-common form of investment scam that is being used to target U.S. retail investors with devastating consequences.” She added: “Fraud is fraud, and we will vigorously pursue securities fraud that harms retail investors.”
The agency detailed the scale of the alleged misconduct, stating:
The defendants misappropriated at least $14 million from U.S.-based retail investors and funneled those funds overseas through a web of bank accounts and crypto asset wallets, as alleged.
The regulator described how the defendants allegedly used paid advertisements on social platforms to recruit victims into Whatsapp groups, where individuals posing as financial professionals promoted artificial intelligence-driven trading tips before directing participants to fake crypto asset trading platforms and nonexistent security token offerings.
The alleged operation involved purported crypto asset trading 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.
Court filings outline that no legitimate trading occurred and that investors were allegedly pressured to pay additional fees when attempting withdrawals. The civil complaint, filed in the U.S. District Court for the District of Colorado, accuses the defendants of violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, with the SEC seeking permanent injunctions, civil penalties, and disgorgement with prejudgment interest.
Separately, the SEC’s Office of Investor Education and Assistance issued guidance urging investors to verify promoters through Investor.gov and remain cautious of opportunities promoted in online group chats. While enforcement actions highlight ongoing risks, regulated crypto businesses, transparent blockchain networks, and compliant tokenization projects continue to demonstrate lawful use cases that support innovation alongside investor protections.
