The U.S. Securities and Exchange Commission, led by pro-crypto chair Paul Atkins, has filed a major fraud complaint in Colorado accusing a network of fake investment clubs and bogus crypto trading platforms of bilking investors out of roughly $14 million. According to the SEC, four groups posing as investment clubs — AI Investment Education, AI Wealth, Lane Wealth, and Zenith Asset Tech Foundation — operated largely through WhatsApp and other social channels, recruiting members with promises of AI-generated trading tips and the expertise of seasoned financial professionals. Investors were steered toward three purported crypto trading platforms — Morocoin Tech, Berge Blockchain Technology, and Cirkor — which the clubs described as offering “security token offerings” akin to IPOs in legitimate markets. “This was an elaborate confidence scam,” the SEC said in its complaint, alleging that investor funds were never deployed as promised and were instead misappropriated from the outset. The complaint says scammers built trust via social media ads and private group chats, then persuaded victims to deposit money into accounts on the fake platforms — platforms that were falsely claimed to hold government licenses. Victims who tried to pull funds back were told to pay upfront “withdrawal fees”; the SEC says no withdrawals were ever honored. One of the named clubs, AI Investment Education, had been registered with the SEC as an investment adviser — but the filing showed it had no assets under management, and a listed phone number is reportedly out of service. The complaint alleges the stolen $14 million was moved overseas through a complex network of bank accounts and cryptocurrency wallets. Laura D’Allaird, chief of the SEC’s Cyber and Emerging Technologies Unit, described the case as emblematic of a common confidence-scheme playbook that uses social media and group chats to lure victims and then siphons funds into nonexistent crypto trading platforms with devastating results. The SEC’s action highlights persistent fraud tactics in crypto: impersonated credentials, fabricated licensing claims, withdrawal-fee ruses, and heavy reliance on encrypted messaging apps to recruit and isolate victims. Investors should be wary of social-media investment clubs, unsolicited trading tips, and platforms demanding fees to process withdrawals. Featured image from DALL·E, chart from TradingView.com. Read more AI-generated news on: undefined/news

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