The scheme directed victims to a fake trading environment, and then demanded advance fees when investors attempted to withdraw funds.
The Securities and Exchange Commission (SEC) filed fraud charges yesterday (Monday) against seven companies it says ran a year-long scheme that bilked retail investors out of more than $14 million through fake cryptocurrency trading platforms and bogus WhatsApp investment clubs.
The regulator charged crypto platforms Morocoin Tech Corp., Berge Blockchain Technology Co., and Cirkor Inc., along with investment clubs AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd., and Zenith Asset Tech Foundation, with violating federal securities laws. All seven entities are now defunct.
The scheme started with social media advertisements that directed U.S. investors to join WhatsApp groups masquerading as investment clubs. Some ads featured deepfake videos of well-known financial professionals, according to the complaint filed in U.S. District Court for the District of Colorado.
The use of WhatsApp for investment fraud has become increasingly common. A joint survey by FinanceMagnates.com and FXStreet found that messaging apps like Telegram and WhatsApp lead in the number of traders who lose money to scams, with 60 percent of traders victimized on Telegram reporting fund losses.
Each club operated through WhatsApp, with agents posing as professors who offered market commentary and assistants who handled daily interactions with members. These agents sent trade recommendations they falsely claimed were based on AI-generated “signals”.
The same individual in Beijing paid for the corporate registrations of AI Wealth, Lane Wealth, and Zenith, according to corporate records cited in the complaint.
After gaining investors’ trust, the club operators directed victims to open accounts on the three purported crypto trading platforms. The platforms’ websites shared common features, with Morocoin and Cirkor both billing themselves as the “World’s First Stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Read this Term Trading Center” and posting identical informational articles about crypto assets.
The platforms falsely claimed to hold licenses from the SEC, the NFA, and FinCEN Money Services Business registrations. Morocoin’s and Cirkor’s websites touted “Impeccable Security” using “cutting-edge” technology and claimed to have “$150 million in insurance against third-party theft.”
The impersonation tactic mirrors a broader trend. Scammers have increasingly posed as bank CEOs and financial influencers in WhatsApp groups to steal money, promoting fake trading schemes through seemingly legitimate channels.
No trading actually occurred on any of the platforms, according to the SEC. The accused companies instead offered what they called “Security Token Offerings” supposedly issued by legitimate businesses including NeuralNet, SatCommTech, and HumanBlock.
All three companies were fictitious. NeuralNet purportedly developed brain-computer interface technology, SatCommTech claimed to build satellite communication networks, and HumanBlock allegedly created blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term-powered humanoid robots.
The WhatsApp club operators compared the token offerings to initial public offerings of stock and promised outsized returns. “It could very well define the most glorious moment of your financial life,” one Zenith club operator told investors about the HumanBlock token.
The use of deepfake videos in the social media advertisements represents a growing threat to investors. Fraudsters have impersonated prominent financial figures using AI-generated videos to lure victims into fake investment schemes on platforms like Facebook and WhatsApp.
Scammers also use AI to craft convincing messages. A recent study documented 236 major crypto scam cases, with fraudsters using AI-written messages on WhatsApp before moving victims to other platforms like Telegram to complete the fraud.
When investors tried to withdraw funds, the platforms demanded advance fees. Some were told they had to repay fictitious loans they supposedly took through the platforms.
In June 2024, Morocoin told investors it was under investigation by the SEC and MSB regulators, which would freeze all accounts for three years. The platform urged investors to withdraw assets within ten days but said they needed to pay expedited withdrawal fees using money from outside their accounts.
Berge and Cirkor posted nearly identical notices in January 2025 about supposed SEC investigations. None of these investigations were real.
The pressure tactics are common features of investment scams on social media. European regulators have warned about fraudsters impersonating financial authorities, falsely offering recovery services for upfront fees after victims fall for fake investment schemes promoted through Instagram and Facebook ads .
Laura D’Allaird, Chief of the SEC’s Cyber and Emerging Technologies Unit, said in a statement that the case “highlights an all-too-common form of investment scam that is being used to target U.S. retail investors with devastating consequences”.
The SEC traced at least $7.4 million in cryptocurrency losses from 57 U.S. investors and $6.6 million in fiat currency losses from 26 investors. One Cirkor investor wired over $1.4 million to a bank in Indonesia, while a Morocoin investor made seven separate wires totaling more than $1 million to accounts in China and Hong Kong.
The stolen funds moved through a network of at least 27 domestic bank accounts and multiple unhosted crypto wallets. Some funds transited through accounts held by Chinese or Burmese individuals in southeast Asia.
Federal prosecutors separately seized $8.5 million worth of Tether cryptocurrency connected to investment fraud victims, the Justice Department announced last week.
The SEC is seeking permanent injunctions, civil penalties against all seven defendants, and disgorgement with prejudgment interest against the three platform operators.
