SEC Charges $14M AI Crypto Trading Scams in Social Media Groups

The SEC has charged three crypto trading platforms and four AI investment clubs on December 22 for allegedly stealing over $14 million from U.S. retail investors. The victims were attracted through social media and WhatsApp groups.

Details of the Scheme

Companies involved: Morocoin Tech Corp., Berge Blockchain Technology Co. Ltd., Cirkor Inc., AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd., and Zenith Asset Tech Foundation.
Timeframe: January 2024 - January 2025.
Method: Fake crypto asset trading platforms and club-style pools without real trades.
Victims were lured from social media ads, using deepfake videos of finance figures.
Promoters used WhatsApp groups with "professors" pushing AI-generated trading signals.
Platforms claimed to offer high-yield, zero-risk Security Token Offerings, which were fake.
When withdrawing, victims were asked for upfront taxes, fees, or deposits under false pretenses.

The SEC filed the enforcement action in the District of Colorado, citing violations of the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. They seek injunctions, disgorgement with interest, and civil penalties against all defendants.

AI Tools and Fraud Risks

Fraud rings are using AI tools, including deepfakes and scripted bot commentary, to simulate expert-led trading communities.
The SEC linked these charges to a trend of social media-to-messaging app fraud, similar to past scams involving fake exchanges like NanoBit and CoinW6.
FINRA reported a 300% increase in complaints about fraudulent investment groups starting on social platforms and moving to encrypted chats.