Key Insights
- SEC accused seven parties of a coordinated crypto investment scam.
- Fake platforms and AI claims were used to mislead US retail investors
- Regulators allege that over $14 million was misappropriated and sent abroad.
U.S. Regulator Charges Seven Entities Over $14M Social Media Fraud
The SEC’s crypto investment scam enforcement action widened this week after the U.S. Securities and Exchange Commission launched charges against seven entities that allegedly arranged and executed a coordinated fraud scheme, reportedly draining over $14 million from retail investors.
According to regulators, the operation utilized social media advertising, messaging applications, and fake crypto-related products to deceive victims into believing they were engaging in legitimate investment opportunities.
The complaint submitted by the SEC indicated that the alleged scheme operated between January 2024 and January 2025, with the majority of its targets being retail investors in the United States.
The agency alleges that the defendants collaborated in what it describes as an “investment confidence scam,” a scheme that employed layered deception to establish trust before extracting funds.
Entities Named in the SEC Crypto Investment Scam Case
The SEC identified three purported crypto asset trading platforms and four investment clubs as defendants. The trading platforms named are Moroccan Tech Corp., Berge Blockchain Technology Co., Ltd., and Cirkor Inc.
Additionally, the investment clubs include AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd., and Zenith Asset Tech Foundation.
Regulators allege that none of the platforms engaged in legitimate trading activity and that the investment clubs played a key role in recruiting investors.
According to the filing, the defendants presented themselves as interconnected but independent organizations, a structure that regulators say was intended to reduce suspicion among potential investors.
The SEC crypto investment scam allegations state that the entities collectively promoted what appeared to be structured investment programs tied to digital assets, despite lacking any underlying operations or assets.
Hiring via Social Media and Messaging Apps.
According to the SEC, the recruitment process began with advertisements posted on social media. Once in touch, the prospective investors were reportedly engaged in private WhatsApp conversations, facilitated by individuals claiming to be seasoned financial experts.
Nonetheless, these groups included defendants who allegedly shared AI-generated tradiinsightsght and market commentary.
The complaint alleges that investors were misled into believing that the artificial intelligence tools were being used to generate steady trading gains.
Fabricated Tokens and Fake Trading Activity
In addition to promoting supposed AI-assisted strategies, the defendants allegedly offered what they described as “security token offerings.” These offerings were presented as being issued by legitimate companies and as compliant investment products.
The SEC alleges that neither the tokens nor the companies behind them existed. Regulators state that no actual trading occurred on the platforms and that all reported account balances and returns were fabricated.
Misappropriation and Money Transfers.
The agency has not disclosed the full geographic scope of the alleged transfers but states that tracing efforts identified multiple layers intended to obscure the flow of funds. The SEC alleges that investor funds were not segregated or safeguarded in any manner consistent with legitimate financial operations.
Laura D’Allaird, chief of the SEC’s Cyber and Emerging Technologies Unit, said the case reflects a recurring pattern. She stated that the matter highlights how fraudsters continue to exploit AI-related claims and crypto narratives to target retail investors through online channels.
Legal Citation and Demanded Reliefs.
The defendants were accused by the SEC of violating the anti-fraud clauses of the Securities Act of 1933 and the Securities Exchange Act of 1934. The agency is also pursuing permanent injunctions, civil monetary penalties, and disgorgement of allegedly ill-gotten gains, along with interest.
The SEC crypto investment scam case adds to a series of enforcement actions focused on online investment fraud involving digital assets.
Regulators note that the use of messaging platforms and informal investment groups has accelerated the speed at which such schemes can reach a large number of individuals.
Broader Enforcement Context
In a separate case, a federal judge recently sentenced Magdaleno Mendoza, a well-known senior promoter of the IcomTech cryptocurrency Ponzi scheme, to approximately six years in prison.
Prosecutors stated that Mendoza promoted guaranteed returns, hosted recruitment events, and collected substantial sums of cash from participants.
At the same time, the SEC’s overall enforcement posture toward the cryptocurrency industry has undergone a shift. Since President Donald Trump returned to office, the agency has reduced its enforcement activity related to cryptocurrencies.
