SEC charges fake crypto platforms and AI investment clubs in $14M fraud scheme
The SEC charged seven entities with operating a coordinated investment scam that defrauded retail investors of at least $14 million. Fraudsters used social media ads and WhatsApp groups to promote fake AI trading tips and non-existent cryptocurrency trading platforms, misappropriating investor funds and routing them overseas.
What happened
The SEC filed charges against seven entities accused of operating a coordinated 'investment confidence scam' from January 2024 through January 2025. The fraudsters allegedly used social media ads and WhatsApp groups to recruit investors and promote fake AI-generated investment tips and fake cryptocurrency trading platforms.
Once investors were engaged in WhatsApp groups where fraudsters posed as financial professionals, they were directed to open and fund accounts on three fake platforms: Morocoin Tech Corp., Berge Blockchain Technology Co. Ltd., and Cirkor Inc. The defendants also allegedly offered fraudulent 'security token offerings' that were presented as being issued by legitimate companies.
According to the SEC, no real trading occurred on any of the platforms. Investors who attempted to withdraw funds faced additional hurdles including demands for advance fees. At least $14 million was misappropriated from US-based retail investors and routed overseas through bank accounts and crypto wallets.
Reported impact
At least $14 million was misappropriated from US-based retail investors. Investors lost their capital when no real trading occurred and the platforms proved to be fraudulent.
Index analysis
The scheme demonstrates how fraudsters used AI-related branding and cryptocurrency narratives to build credibility with retail investors. The use of messaging apps like WhatsApp allowed fraudsters to pose as financial professionals and move conversations away from platform monitoring.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.