The U.S. Securities and Exchange Commission has sued several cryptocurrency companies for allegedly defrauding retail investors out of more than $14 million through fake WhatsApp investment groups and bogus trading platforms. The scheme, which ran from January 2024 to January 2025, used social media ads, deepfake videos, and AI-generated tips to lure victims. Regulators say the operators, based in China, Malaysia, and Hong Kong, misappropriated funds sent to overseas accounts.
The Securities and Exchange Commission (SEC) filed a 29-page complaint on Monday in Colorado District Court against Morocoin Tech, Berge Blockchain Technology, Cirkor, AI Wealth, Lane Wealth, AI Investment Education Foundation, and Zenith Asset Tech Foundation. These entities, registered in Washington or Colorado, operated unregistered "investment clubs" on WhatsApp, enticing users via social media advertisements featuring deepfake videos of prominent financial professionals.
From January 2024 to January 2025, the groups posed as advisory services run by fake financial experts and professors, sharing AI-generated investment tips and manipulated screenshots of successful trades. Members were directed to deposit funds into the three purported crypto trading platforms, which mimicked legitimate interfaces with real-time prices and account balances but conducted no actual trading.
Investors funded accounts using fiat currency wired to designated banks or couriers, or by transferring crypto to unhosted wallets controlled by the platforms. The scammers offered fake "security token offerings" (STOs), such as tokens from a nonexistent company called NeuralNet, promoted for brain-computer interface technology. One conspirator described these as "akin to IPOs in the stock primary market" and hyped their potential to "transcend humanity into space."
When victims attempted withdrawals, operators demanded advance fees, which were never refunded. The $14 million stolen was laundered through blockchain transfers and at least 27 domestic U.S. bank accounts, ultimately reaching accounts in China, Hong Kong, Indonesia, and held by individuals in Southeast Asia, including Burmese and Chinese nationals. Specific losses included one investor wiring over $1 million to China and Hong Kong, and another sending $1.4 million to Indonesia. At least one victim reported $156,000 in losses to local police.
"This matter highlights an all-too-common form of investment scam that is being used to target U.S. retail investors with devastating consequences," said Laura D’Allaird, chief of the SEC’s Cyber and Emerging Technologies Unit. The SEC is seeking a cease-and-desist order, disgorgement of ill-gotten gains, civil penalties, and a jury trial. Complaints about the firms had previously reached regulators in Washington and Arkansas, and the companies' websites have since been removed.
