The U.S. Securities and Exchange Commission (SEC) has filed charges against seven different entities for a wide-ranging cryptocurrency fraud targeting retail investors. The SEC alleges that these entities collected over $14 million from investors through an organized investment scam conducted via social media and messaging applications.
Three cryptocurrency platforms and four investment “clubs” are involved.
The lawsuit, filed Monday in Colorado District Court, alleges that three so-called cryptocurrency trading platforms and four investment clubs acted together to implement a scheme described as “investment trust fraud.” According to the SEC, this scheme aimed to gain the trust of investors, particularly through social media advertisements and closed messaging groups.
The so-called trading platforms named in the lawsuit are Morocoin Tech Corp., Berge Blockchain Technology Co., Ltd., and Cirkor Inc.; while the investment clubs are AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd., and Zenith Asset Tech Foundation. The regulator argued that these structures did not actually engage in any legitimate activity.
According to the SEC, the fraudulent activity took place between January 2024 and January 2025. In the first phase of the process, users were invited to groups under the name "investment club" through advertisements on popular social media platforms. These groups were primarily managed via WhatsApp. Group administrators established trust with participants through one-on-one and group chats, presenting themselves as financial experts or professional investment advisors. In these chat rooms, investors encountered investment advice that, according to the SEC, gave the impression of being AI-powered. The aim of this content was to increase the clubs' credibility by creating the perception of regular and stable earnings. Investors were then asked to open accounts on platforms called Morocoin, Berge, and Cirkor and transfer funds to these accounts.
However, according to the regulator, these platforms were entirely fake, and no real trading transactions took place. It was also alleged that the platforms' claims of offering state-licensed and legal cryptocurrency trading services were untrue. In the later stages of the fraud, investors were offered fake "security tokens." The SEC stated that both these tokens and the companies allegedly issuing them were fictitious. When investors tried to withdraw their money, they encountered a new obstacle. Allegedly, the suspects further increased the losses by demanding additional and upfront fees for withdrawals. The SEC announced that at least $14 million in total was misused through these methods, and that the funds were channeled through bank accounts and cryptocurrency wallets abroad.
Laura D’Allaird, Head of the SEC's Cyber and Emerging Technologies Division, emphasized in a statement that this case highlights a widespread fraud pattern targeting retail investors. On the same day, the agency also issued an investor warning, reminding investors to be cautious about investment offers presented through social media and group chats. The SEC recommended that investors verify the offers and individuals they receive through Investor.gov.
