SEC Takes Action Against Cryptocurrency Scam
The U.S. Securities and Exchange Commission (SEC) has initiated legal proceedings against several companies accused of orchestrating a sophisticated cryptocurrency fraud that deceived retail investors out of over $14 million. The complaint identifies multiple entities, including crypto trading platforms Morocoin Tech Corp., Berge Blockchain Technology Co., Ltd., and Cirkor Inc., along with investment clubs such as AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation (AIIEF) Ltd., and Zenith Asset Tech Foundation, as key players in this fraudulent scheme. The SEC detailed how the scam was executed through a multi-layered approach that attracted victims via social media advertisements, fostering trust through group chats where scammers impersonated financial advisors and promised lucrative returns based on artificial intelligence (AI)-driven investment insights. Ultimately, these fraudsters led their victims to invest in non-existent cryptocurrency trading platforms, resulting in significant financial losses.
Investment Clubs and Messaging Apps Used for Deception
The SEC’s complaint reveals that AI Wealth, Lane Wealth, AIIEF, and Zenith operated investment clubs on platforms like WhatsApp, enticing retail investors to join through targeted social media promotions. The WhatsApp groups for AI Wealth and Lane Wealth were active from January 2024 to June 2024, while AIIEF and Zenith operated between July 2024 and January 2025. An unnamed individual based in Beijing was allegedly responsible for registering AI Wealth, Lane Wealth, and Zenith. The complaint provides specific details about the cryptocurrency platforms involved: Morocoin Tech Corp. was established around December 2023 but is currently delinquent; Berge Blockchain Technology Co., Ltd. began operations in June 2022 and is also delinquent; Cirkor Inc., founded in May 2024, was administratively dissolved in October 2025. Each club featured a “professor” who provided updates on market conditions and stock commentary, alongside an “assistant” who managed daily interactions. These fabricated personas also issued trade recommendations falsely claimed to be based on AI-generated insights.
False Claims and Non-existent Offerings
The SEC stated that these clubs built trust with investors by offering supposedly AI-derived investment tips, which ultimately led victims to fund accounts on fraudulent trading platforms—Morocoin, Berge, and Cirkor—allegedly claiming to be licensed by government authorities. The clubs purportedly offered “Security Token Offerings” (STOs) associated with legitimate businesses, but in reality, no trading activity occurred on these platforms, which were entirely fictitious, and the STOs and their supposed issuing companies were non-existent. For instance, the WhatsApp groups for AI Wealth and Lane Wealth promoted an STO for a cryptocurrency called SCT, allegedly issued by a company named SatCommTech, while the AIIEF and Zenith groups advertised an STO for another asset, HMB, purportedly from HumanBlock, both of which turned out to be fabricated entities.
Second Wave of Fraud During Withdrawal Attempts
When investors sought to withdraw their funds, they faced a second wave of deception, as the fraudulent platforms required them to pay advance fees to access their own money. Ultimately, these platforms cut off investors entirely, leaving them without recourse. The total amount of funds misappropriated in this scheme is estimated at over $14 million, with at least $7.4 million in cryptocurrency and $6.6 million in fiat currency. Notably, one investor from Morocoin reportedly wired over $1 million across seven transactions to accounts in China and Hong Kong, while another Cirkor investor transferred more than $1.4 million to a bank in Indonesia. Numerous accounts on Reddit have surfaced, detailing individuals’ losses from this scam, with the AIIEF using aliases like “Richard Dill” and “Daisy Akemi” for their fake professors and assistants.
Legal Consequences and SEC’s Commitment to Protect Investors
The defendants now face charges for violating anti-fraud provisions outlined in the Securities Act of 1933 and the Securities Exchange Act of 1934. The SEC is pursuing permanent injunctions, civil penalties, and the restitution of the misappropriated funds, along with prejudgment interest. Laura D’Allaird, Chief of the Cyber and Emerging Technologies Unit, emphasized the seriousness of this issue, stating, “This matter highlights an all-too-common form of investment scam that is being used to target U.S. retail investors with devastating consequences. Fraud is fraud, and we will vigorously pursue securities fraud that harms retail investors.”
