SEC charges 7 entities in $14M crypto scam involving fake trading platforms

The US Securities and Exchange Commission has filed charges against three crypto asset trading platforms and four investment clubs that it claims defrauded U.S. retail victims out of roughly $14 million.

According to a statement published earlier this week, Morocoin Tech Corp., Berge Blockchain Technology Co. Ltd., and Cirkor Inc. operated a fraudulent scheme alongside affiliated entities AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd., and Zenith Asset Tech Foundation, which advertised themselves as investment clubs.

These seven entities allegedly used their coordinated operations to carry out an “investment confidence scam” that preyed on unsuspecting individuals through targeted promotions on social media and messaging apps.

“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,” said Laura D’Allaird, Chief of the Cyber and Emerging Technologies Unit.

What did the SEC allege?

Between January 2024 and January 2025, the fraudulent investment clubs operated primarily through WhatsApp and drew in hundreds of retail investors via social media campaigns that promised quick profits and exclusive access to financial expertise.

Those joining the clubs were allegedly offered what appeared to be AI-generated investment tips in a bid to establish credibility and build confidence, all the while working to steer members into opening and funding accounts on the aforementioned crypto trading platforms.

Elsewhere, these trading platforms were being advertised as legitimate services that had secured government licenses.

The ultimate bait was an alleged “Security Token Offerings” scheme that was offered to victims once they had been onboarded. 

The scammers promoted the tokens as being backed by legitimate businesses, but in reality, as the SEC noted, “no trading took place on the trading platforms, which were fake, and the Security Token Offerings and their purported issuing companies did not exist.”

Like most digital asset scams, when victims attempted to withdraw their funds, the scammers blocked them and demanded additional fees upfront under various pretences.

Using these tactics, the scammers managed to siphon at least $14 million from US-based retail investors, the commission estimates. 

These funds were then routed to overseas locations through a network of bank accounts and crypto wallets.

As part of the complaint, the SEC is seeking permanent injunctions and civil penalties against all seven entities, along with disgorgement of ill-got gains from the platforms Morocoin, Berge, and Cirkor.

SEC takes action against crypto crime

Although the SEC has partially reversed its hardline stance against the crypto sector this year under President Donald Trump’s administration, it has continued to take action against illicit activity tied to digital assets.

Throughout 2025, the SEC has pursued several high-profile enforcement cases that amount to hundreds of millions of dollars in investor losses.

For instance, in April, the SEC brought charges against Ramil Palafox, the CEO of PGI Global, for orchestrating a $198 million international fraud scheme tied to crypto and forex trading.

In May, the watchdog took action against Unicoin Inc. and several of its top executives, accusing them of defrauding investors out of more than $100 million through misleading and unregistered securities offerings.

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