SEC Charges Crypto Platforms and Investment Clubs in $14 Million Fraud Scheme Targeting Retail Investors

SEC Unveils $14 Million Crypto Investment Scam Targeting Retail Investors

Denver, CO — In a significant crackdown on fraudulent investment schemes, the Securities and Exchange Commission (SEC) has filed charges against several crypto asset trading platforms and investment clubs, alleging they defrauded retail investors out of more than $14 million in an elaborate scam. The defendants include Morocoin Tech, Berge Blockchain Technology, Cirkor, and investment clubs AI Wealth Inc., Lane Wealth, AI Investment Education Foundation, and Zenith Asset Tech Foundation.

Laura D’Allaird, Chief of the SEC’s Cyber and Emerging Technologies Unit, emphasized the severity of the situation, stating, “This matter highlights an all-too-common form of investment scam that is being used to target U.S. retail investors with devastating consequences.” The complaint outlines a multi-step fraud scheme that lured victims through social media advertisements and built trust via group chats, where fraudsters masqueraded as financial professionals promising lucrative returns from AI-generated investment tips.

According to the SEC’s complaint, the fraudulent activity spanned from January 2024 to January 2025. The investment clubs utilized platforms like WhatsApp to solicit investors, enticing them with ads that promised high returns. Victims were then directed to open accounts on the purported trading platforms—Morocoin, Berge, and Cirkor—which falsely claimed to be government-licensed.

The defendants allegedly offered “Security Token Offerings” purportedly issued by legitimate businesses. However, the reality was starkly different: no actual trading occurred on these platforms, and the Security Token Offerings, along with their supposed issuing companies, were entirely fictitious.

When investors attempted to withdraw their funds, they faced further deception. The complaint alleges that the defendants demanded advance fees, effectively trapping victims in a cycle of fraud. In total, the defendants misappropriated at least $14 million from U.S.-based retail investors, funneling the funds overseas through a complex web of bank accounts and crypto wallets.

Filed in the United States District Court for the District of Colorado, the SEC’s complaint charges the defendants with violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The SEC is seeking permanent injunctions and civil penalties against all defendants, as well as disgorgement with prejudgment interest from Morocoin, Berge, and Cirkor.

In light of this alarming case, the SEC’s Office of Investor Education and Assistance has issued a warning to investors. They caution that fraudsters often exploit popular social media platforms and messaging apps to lure unsuspecting individuals into scams. The SEC advises investors to conduct thorough research and utilize resources like Investor.gov to verify the backgrounds of anyone offering investment opportunities.

As the investigation unfolds, the SEC remains committed to protecting retail investors from fraudulent schemes that threaten their financial well-being.