SEC Charges Fake Crypto Platforms and AI Investment Clubs in $14M Scam
The U.S. Securities and Exchange Commission (SEC) has filed charges against a network of alleged fake crypto trading platforms and AI-branded investment clubs, accusing them of running a coordinated scheme that defrauded retail investors of over $14 million.
How the Scam Worked
According to the SEC, the scheme ran from January 2024 through January 2025, targeting everyday investors through social media ads and WhatsApp groups. Fraudsters posed as financial professionals, offering AI-generated trading tips to build trust.
Investors were then directed to open accounts on platforms like Morocoin, Berge, and Cirkor, which claimed to be licensed crypto trading platforms. They were also offered “security token offerings” supposedly issued by legitimate companies.
In reality, no trading ever took place, the tokens were fake, and the companies did not exist. When investors tried to withdraw funds, they faced additional hurdles, including requests for advance fees, further draining their accounts.
Overall, at least $14 million was misappropriated from U.S.-based retail investors and routed overseas through a network of bank accounts and crypto wallets.
“This matter highlights an all-too-common form of investment scam,” said Laura D’Allaird, chief of the SEC’s Cyber and Emerging Technologies Unit. She emphasized how fraudsters are now leveraging AI claims and crypto narratives to lure unsuspecting investors.
Legal Action
The SEC has charged the defendants with violating anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, seeking permanent injunctions, civil penalties, and disgorgement with interest.
Broader Context
This case comes as the SEC has scaled back crypto enforcement under the Trump administration, with nearly 60% of crypto-related cases dropped, paused, or dismissed. High-profile cases against companies like Ripple Labs and Binance have been affected.
Despite the slowdown in crypto enforcement, the SEC continues to target fraudulent schemes and emphasizes investor protection, particularly as AI and crypto scams become more sophisticated.
