U.S. regulators sue crypto platforms over alleged multi-million retail fraud

The SEC’s complaint, filed on December 22, 2025, in the United States District Court for the District of Colorado names three allegedly fake crypto asset trading platforms — Morocoin Tech Corp., Berge Blockchain Technology Co. Ltd. and Cirkor Inc. — and four related “investment clubs.” The regulator says the defendants used social media advertising and WhatsApp group chats to build trust with U.S. retail investors and steer them toward depositing funds into accounts on the bogus platforms, where the money was misappropriated.

According to the SEC, the scheme operated from at least January 2024 through January 2025, during which members of the investment clubs — including AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd. and Zenith Asset Tech Foundation — shared purported AI-generated investment tips and engaged investors in group chats hosted on WhatsApp and other messaging platforms. The defendants allegedly persuaded victims to open and fund accounts on the trading platforms by portraying them as legitimate, licensed crypto exchanges with profitable opportunities.

The complaint states that the platforms and clubs offered “Security Token Offerings” that were presented as being issued by real businesses but did not exist in fact. When investors attempted to withdraw their funds, the defendants allegedly imposed advance fees and other barriers, and in total at least $14 million was misappropriated from U.S.-based retail investors and moved through a web of overseas bank accounts and crypto wallets.

Laura D’Allaird, chief of the SEC’s Cyber and Emerging Technologies Unit, said the complaint describes a “multi-step fraud” in which the defendants first attracted victims with social media ads, then built trust in group chats where fraudsters posed as financial professionals, and finally convinced them to transfer funds into the fake platforms.

The SEC alleges violations of anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, and is seeking permanent injunctions and civil penalties against all defendants, as well as disgorgement with prejudgment interest from the three trading platform entities.

In its press release, the SEC noted that none of the investment club or platform operators were registered with the agency. The regulator’s Office of Investor Education and Assistance has issued an alert cautioning investors not to rely solely on information from social media or group chats when evaluating investment opportunities and to use tools such as Investor.gov to verify the background of those offering financial deals.

The complaint indicates the funds were funneled overseas through a network of accounts linked to both crypto wallets and international banks, with some transfers traced to individuals or accounts in regions including Southeast Asia, making recovery for victims more complex.

Confidence scams and fraudulent crypto investment schemes frequently involve elaborate narratives and fabricated services to win investor trust before misusing deposited funds. Enforcement actions like this follow investigations that trace funds, communications and promotional activity to build a case that defendants engaged in deceptive practices prohibited under U.S. securities laws.