U.S. SEC files suit against crypto investment fraud organization involving US$14 million

The U.S. Securities and Exchange Commission (SEC) has filed charges against firms and groups in connection with a cryptocurrency investment scam that targeted individual investors via social media. Authorities said the organized fraud, which used fake trading platforms and investment clubs, caused at least US$14 million in losses.

According to The Block on the 23rd (local time), the SEC filed a civil complaint in the U.S. District Court for the District of Colorado against three firms posing as cryptocurrency trading platforms and four investment clubs. The SEC said it concluded they were operating an organized "investment confidence scam."

The defendants include Morocoin Tech Corp., Berge Blockchain Technology Co., Ltd., Cirkor Inc., as well as AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd., and Zenith Asset Tech Foundation.

The SEC said the fraudsters placed ads on major social media platforms such as Facebook from January 2024 to January 2025 to lure victims. Through the ads, investors were invited to WhatsApp-based investment clubs, where the scammers posed as financial professionals and built trust in group chats.

In the chat rooms, investment advice generated by artificial intelligence (AI) was presented to create the appearance of steady returns. Investors were then induced to open accounts and deposit funds on platforms such as Morocoin, Berge, and Cirkor, but the SEC said those platforms were fake exchanges that did not actually exist.

The scam expanded to promoting fake security token offerings (STOs). The SEC explained that both the tokens and the issuers were fictitious, and that when investors tried to withdraw funds they were asked for additional upfront payments, which increased the losses. During this process, victim funds were reportedly moved abroad through overseas bank accounts and crypto wallets.

Laura D'Allaird, head of the SEC's Cyber and New Technologies unit, warned, "This case illustrates a very common scam that targets U.S. retail investors using social media and messaging apps," adding, "Group chat rooms where unknown people offer investment advice are often the starting point for scams." The SEC urged investors to verify the identity of anyone offering investments via Investor.gov.