SEC Targets $14M Crypto Scam Exploiting Retail Investors on Social Media

U.S. regulators have filed charges against three purported crypto trading platforms and four investment clubs for defrauding retail investors out of over $14 million. The Securities and Exchange Commission (SEC) alleges that Morocoin Tech Corp., Berge Blockchain Technology Co. Ltd., and Cirkor Inc., together with AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd., and Zenith Asset Tech Foundation, orchestrated a sophisticated scheme that preyed on social media users.

According to the SEC, from January 2024 through January 2025, the investment clubs used WhatsApp and social media advertisements to lure investors, claiming to provide AI-generated trading tips. Once trust was established, victims were directed to open accounts on the fake trading platforms, which falsely claimed government licenses. The platforms offered so-called “Security Token Offerings,” supposedly issued by legitimate companies, but in reality, neither the trading nor the token offerings existed.

Victims attempting withdrawals were reportedly asked to pay additional fees, further draining their funds. The SEC alleges the defendants funneled the stolen $14 million overseas through a complex network of bank accounts and crypto wallets.

“This case underscores the increasing sophistication of online investment scams,” said Laura D’Allaird, Chief of the SEC’s Cyber and Emerging Technologies Unit. “Fraudsters are exploiting social media and the allure of AI-driven crypto trading to misappropriate funds from unsuspecting retail investors.”

The complaint, filed in the U.S. District Court for the District of Colorado, charges the defendants with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. The SEC is seeking permanent injunctions, civil penalties, and disgorgement with prejudgment interest for the trading platforms.

Investors are urged to verify platforms and investment offers carefully, especially those promoted online or through social media, and to exercise extreme caution with promises of AI-assisted trading returns.