US SEC Files Fraud Charges Against Crypto Platforms for $14 Million Scheme

TLDR

• SEC sues crypto platforms and investment clubs for a $14 million fraud targeting U.S. retail investors.

• Fraudulent companies ran fake trading platforms using social media ads and deepfake videos.

• SEC tracked stolen funds to Southeast Asia, including China, Indonesia, and Hong Kong.

• Victims of the scam reported losing substantial sums, with some taking out loans to invest.

Federal regulators, led by the U.S. Securities and Exchange Commission (SEC), have filed charges against multiple cryptocurrency companies for defrauding investors of over $14 million. The SEC’s complaint, filed on Monday, targets Morocoin Tech, Berge Blockchain Technology, Cirkor, AI Wealth, Lane Wealth, AI Investment Education Foundation, and Zenith Asset Tech Foundation. These companies allegedly ran a coordinated investment scam targeting U.S. retail investors over the past year.

The SEC claims that the defendants used social media advertisements to lure investors, promoting fraudulent “investment clubs” operated via WhatsApp. These clubs, often populated with fake professors, deepfake videos, and AI-generated investment tips, presented themselves as legitimate sources of financial advice. The companies also offered fake security token offerings and promised government licenses, which they never had.

Scam Details and How It Operated

According to the SEC’s 29-page complaint, the companies ran their fraudulent operations from January 2024 to January 2025. They used WhatsApp group chats to promote fake trading platforms such as Morocoin, Berge, and Cirkor. The platforms reportedly provided manipulated screenshots of successful trades, luring investors to open cryptocurrency accounts on these platforms.

The scammers encouraged investors to deposit funds into accounts promising high returns through these fraudulent platforms. However, when investors tried to withdraw their funds, they were told to pay additional fees. The funds, which total more than $14 million, were eventually funneled into overseas bank accounts and cryptocurrency wallets, many of which were traced to Southeast Asia, including China, Indonesia, and Hong Kong.

The SEC claims that the scam exploited U.S. retail investors, many of whom believed they were investing in legitimate opportunities. The fraudulent nature of the operations only came to light when investors attempted to withdraw their money and were met with obstacles. Several victims have reported losses ranging from thousands of dollars to over $150,000.

Tracking the Stolen Funds and Victim Impact

The SEC tracked the stolen funds to international accounts, including wire transfers from Morocoin investors to China and Hong Kong, and from Cirkor investors to Indonesia.

One Morocoin investor transferred more than $1 million in seven separate wires to Chinese accounts, while a Cirkor investor sent over $1.4 million to Indonesia.

“The matter highlights an all-too-common form of investment scam targeting U.S. retail investors, with devastating consequences,” said Laura D’Allaird, chief of the SEC’s Cyber and Emerging Technologies Unit. The SEC has vowed to pursue civil penalties against the companies involved and is seeking justice for the victims.

Wider Concerns and Legal Efforts Against Crypto Fraud

This case is part of a larger effort by U.S. regulators to clamp down on crypto fraud, particularly scams originating from Southeast Asia. Earlier in December, the Justice Department dismantled a fraudulent website used by Myanmar-based scammers who spoofed legitimate forex platforms. The SEC has received numerous complaints about the companies involved in the scam, with state regulators in Washington and Arkansas confirming similar fraud reports from local residents.

The SEC has not only pursued action against these companies but also warned of similar schemes exploiting the growing popularity of cryptocurrency investments. Despite the SEC’s crackdown, many of the fraudulent companies involved have already removed their websites and erased their internet presence, making it harder for regulators to track them down.

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