Federal regulators have accused a web of companies and investment clubs of orchestrating a sophisticated cryptocurrency fraud that siphoned more than $14 million from retail investors, using artificial intelligence as its central lure. In a civil complaint filed this week, the U.S. Securities and Exchange Commission charged multiple crypto trading platforms and affiliated investment groups with running what it described as a multi-stage deception, built to mimic legitimate financial advice and regulated digital asset markets.
According to the SEC, the operation relied heavily on social media advertising to draw in victims, promising access to AI-powered investment strategies at a time when interest in artificial intelligence and crypto assets has surged. Once prospects responded, they were ushered into private messaging groups where scammers posed as seasoned market professionals, offering daily commentary on global markets and assured returns generated by proprietary AI “signals.”
Behind the polished messaging, regulators allege, there was no real trading, no advanced technology—and no legitimate investment opportunity.
Inside the Fake Investment Clubs
The complaint names several entities that allegedly formed the backbone of the scheme, including purported crypto platforms Morocoin Tech Corp., Berge Blockchain Technology Co., Ltd., and Cirkor Inc., alongside investment clubs operating under banners such as AI Wealth, Lane Wealth, the AI Investment Education Foundation and Zenith Asset Tech Foundation.
Regulators say these clubs operated largely through WhatsApp, with carefully assigned roles. Each group featured a “professor,” who delivered macroeconomic updates and stock commentary, and an “assistant,” who managed logistics and reassured members. Together, they promoted investment opportunities that were falsely claimed to be driven by AI-generated insights.
Investors were eventually directed to open accounts on the affiliated crypto platforms, which allegedly misrepresented themselves as licensed and government-approved. The SEC says these platforms existed largely as façades, designed to accept deposits while displaying fabricated account balances and trading activity.
Phantom Tokens and the Second Betrayal
Central to the scheme were so-called Security Token Offerings, or STOs, pitched as early-stage investments in cutting-edge blockchain ventures. The complaint alleges that these offerings—such as tokens labeled SCT and HMB—were tied to companies that did not exist outside the scammers’ narratives.
Once funds were deposited, investors found themselves trapped. When some attempted to withdraw money, they were told to pay additional “fees” or “taxes” to unlock their balances—only to lose more funds. Ultimately, access to accounts was cut off entirely.
Regulators say the illusion of profitability, combined with the authority projected by the investment clubs, kept many victims engaged long after doubts surfaced. “Fraud is fraud,” said Laura D’Allaird, who leads the SEC’s Cyber and Emerging Technologies Unit, noting that the use of AI buzzwords did not alter the underlying deception.
Following the Money—and the Broader Pattern
The SEC estimates that at least $14 million was misappropriated, split between cryptocurrency and traditional bank transfers. Investigators traced funds through a maze of accounts and digital wallets, some held overseas, in transactions that moved millions of dollars beyond the reach of victims.
In one instance cited in the complaint, an investor wired more than $1 million across multiple transfers; in another, more than $1.4 million was sent in a single series of transactions. Online forums, including Reddit, later filled with accounts from individuals describing similar losses and eerily consistent tactics.
The case reflects a broader enforcement focus on the intersection of emerging technology and financial fraud. As regulators and courts confront a growing number of AI-themed investment schemes, officials say the underlying lesson remains unchanged: technological sophistication, real or imagined, does not exempt promoters from securities laws—or investors from risk.
The SEC is seeking permanent injunctions, civil penalties and the return of funds, signaling that the agency intends to pursue not just the mechanics of the scam, but the narrative that made it plausible in the first place.
