AI Trading Scam Drains $14M From US Investors

In an advanced fraud, the SEC charges fraudulent crypto platforms and WhatsApp investment clubs with conning retail investors using AI-driven investing advice.

The SEC accused seven firms of defrauding investors to the tune of over 14 million dollars. On December 22, 2025, it declared the intricate confidence scam. Social media advertisements and WhatsApp group discussions attracted victims.

Morocoin Tech Corp., Berge blockchain technology Co. Ltd., and Cirkor Inc. operated fraudulent crypto trading platforms. The investment clubs were run by AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd., and Zenith Asset Tech Foundation. They vowed to make a buck on AI-generated tips.

WhatsApp Groups Masked Fraudulent Operations

The plot was between January 2024 and January 2025. Investment clubs were promoted through social media and invited members to WhatsApp where fraudsters masqueraded as financial experts. The groups established trust and then referred investors to the fraudulent sites

Laura D’Allaird is the Chief of the Cyber and Emerging Technologies Unit of the SEC. She mentioned that the fraud was against American retail investors and with grave repercussions. The multi-step approach incorporated AI hints as bait, and victims were putting money into systems that said they had government licenses.

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Fake Security Tokens Completed The Deception

The sites provided Security Token Offerings, which were allegedly issued by actual companies. As noted in the SEC complaint, no actual trades were made. There were no token offerings and the companies themselves were fictional with the sites showing fake account balances to give the illusion of legality.

Investors experienced additional fraud when they attempted to withdraw money. The defendants requested upfront fees prior to the release of funds. Bank accounts and cryptocurrency wallets were used to transfer stolen money overseas, and retail investors in the United States lost at least $14 million.

The SEC filed the charges in the U.S. District Court in the District of Colorado. The anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934 were breached by the defendants. SEC is pursuing a permanent injunction and civil penalties against all defendants.

Regulators Warn Against Social Media Investment Schemes

The Office of Investor Education and Assistance of the SEC released a warning. Popular social media platforms and messaging applications are also being exploited by fraudsters. Investors must not depend solely on group-chat data. Background Investor.gov checks can make sure who is selling what.

The complaint requests that Morocoin, Berge, and Cirkor restore misappropriated funds and pay prejudgment interest. All seven defendants will face civil penalties. The SEC restated its efforts in combating securities fraud, and retail investor protection is a priority area of enforcement.

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