In recent developments within the cryptocurrency sector, numerous investors have encountered severe difficulties when attempting to access their funds from various trading platforms. These individuals, initially lured by ostentatious dashboards displaying five-figure profits, faced immediate restrictions on withdrawals unless they remitted additional payments categorized as “taxes” or “loan repayments” to offshore accounts. This scenario unfolded with alarming regularity, as victims discovered that in order to cash out their purported gains, they were coerced into paying advance fees ostensibly required to “unlock” their accounts, yet no funds were ever dispersed.
On December 22, 2025, the U.S. Securities and Exchange Commission (SEC) levied charges against three alleged cryptocurrency trading platforms and four investment clubs implicated in an elaborate fraud scheme that defrauded investors of approximately $14 million over a span from January 2024 to January 2025.
Fraudulent Scheme: A Five-Step Playbook
The SEC’s complaint delineates a systematic approach utilized by the perpetrators, functioning as a cautionary guide for potential investors. The outlined methodology comprises five distinct stages:
Step One: Initial Engagement through Social Media
The initial phase involved the deployment of targeted social media advertisements across WhatsApp clubs. The SEC identified the entities involved—AI Wealth, Lane Wealth, AI Investment Education Foundation (AIIEF), and Zenith Asset Tech Foundation—as orchestrators of these promotions. They established “investment clubs” on WhatsApp, masquerading under the guise of knowledgeable personas such as “professors” and “assistants.” This strategy created an illusion of exclusive access to expert financial insights, a tactic so prevalent that Investor.gov has issued explicit alerts cautioning that unsolicited investment clubs on messaging applications represent a primary conduit for fraudulent schemes.
Step Two: Trust-Building through Artificial Intelligence Signals
The second phase of this scheme revolved around the dissemination of purported AI-generated trading signals alongside curated screenshots showcasing fictitious successful trades. Within these chat groups, the so-called “professors” promised extraordinary returns derived from their claimed utilization of proprietary AI software for stock and cryptocurrency trading advice. The SEC’s AI fraud alert notes that scammers increasingly exploit artificial intelligence to fabricate deceptive websites, screenshots, and even deepfake videos to promote fraudulent investments or impersonate legitimate professionals, mirroring the tactics described in the complaint.
Step Three: Diversion to Fabricated Trading Platforms
Once investors had been sufficiently acclimatized to the scheme, they were directed towards three fictitious trading platforms: Morocoin, Berge, and Cirkor. These websites falsely claimed to possess government licensing and security measures; however, actual trading did not occur, and all account balances were artificially constructed. The alleged platforms further misled investors by referring to supposed regulatory inquiries as a means of enhancing credibility—an approach explicitly flagged as a significant red flag by Investor.gov’s PAUSE program.
Step Four: Promotion of Nonexistent Security Token Offerings
The fourth phase involved the promotion of fictitious Security Token Offerings (STOs) under names such as NNET, SCT, and HMB. These were marketed as if they were regulated offerings akin to Initial Public Offerings (IPOs) by real companies like “NeuralNet” and “SatCommTech.” The complaint asserts that neither the issuers nor the offerings existed; rather, these tokens served merely as a mechanism to solicit additional deposits. By framing these tokens as IPO-equivalents, the operators appropriated the legitimacy associated with traditional securities while evading requisite disclosures and registrations mandated for authentic offerings.
Step Five: Withdrawal Barriers and Advance Fees
The final step in this insidious structure involved imposing withdrawal barriers and demanding advance payments from victims. As individuals sought to retrieve their funds, they were informed by platform operators that multiple upfront payments were necessary for procedure completion—these included purported loan repayments, “investigation” fees, and expedited withdrawal charges. Additionally, victims were threatened with account freezes lasting up to three years if they failed to comply with these demands. The SEC categorizes this tactic as classic advance-fee fraud layered onto a fabricated trading platform.
Allegations by the SEC
This case has been filed in the U.S. District Court for the District of Colorado against 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. The SEC alleges that these entities collectively defrauded U.S. retail investors out of at least $14 million between January 2024 and January 2025 while misappropriating all funds by routing them through overlapping bank accounts and cryptocurrency wallets overseas.
The complaint asserts violations of anti-fraud provisions outlined in both the Securities Act and Exchange Act while seeking permanent injunctions against these entities, alongside civil penalties and disgorgement with accrued interest.
The allegations depict a coordinated operation wherein investment clubs systematically funneled victims towards fabricated platforms; these platforms generated illusory account balances while simultaneously leveraging non-existent STOs to extract further investments from victims before ultimately obstructing their ability to withdraw funds.
Identifying Red Flags
The current corpus of investor education materials aligns seamlessly with the tactics delineated in this case. Specific red flags emerge from these tactics:
1. The Role of Group Chat “Professors”
Investor.gov warns that unsolicited investment clubs on messaging apps are a predominant gateway for scams. Investors should exercise caution when engaging with any group led by an unidentified individual dispensing stock or cryptocurrency advice.
2. Artificially Generated Signals
The utilization of AI-generated signals creates an illusion of sophistication among fraudulent platforms. The SEC’s AI fraud alert highlights how scammers leverage artificial intelligence to produce convincing content—including deepfake videos—to market fictitious investments or impersonate legitimate professionals.
3. Fabricated Licenses
A significant indicator is the presence of purported government licenses which are ultimately fictitious. Scammers often reference regulatory investigations to coerce victims into remitting fees; legitimate entities will provide verifiable information without resistance.
4. Promises of Guaranteed Returns
The allure of guaranteed returns or claims of low-risk investments powered by advanced algorithms constitutes a hallmark of fraudulence. Legitimate financial advisors cannot guarantee performance; any assertions claiming otherwise signal potential deceit.
5. Withdrawal Fees or Taxes
The imposition of fees or taxes prior to withdrawal is emblematic of advance-fee fraud schemes. Regulatory bodies consistently underscore that reputable firms deduct fees from proceeds rather than soliciting prepayments for access to investors’ own capital.
6. Coercion for Fund Transfers
An additional warning sign involves pressure tactics urging victims to wire funds or transmit cryptocurrency to unidentified wallets—often leading directly into scammers’ accounts with little recourse for recovery once sent.
| Scam Claim (or Pattern) | What’s Actually Happening | Verification Method |
|---|---|---|
| “We’re SEC-licensed / fully regulated” | The entities associated with Morocoin/Berge/Cirkor are absent from SEC or FINRA registries; licensing claims are fabricated. | Search using Investor.gov’s “Check Out Your Investment Professional” tool; no results warrant avoidance. |
| “Your profits are visible in your app – you’re up 40% already” | The portfolio display is merely a user interface; actual brokerage accounts do not exist. | Inquire about account custody details; contact the custodian independently for verification. |
| “Our AI trading model has never lost – low risk guaranteed returns” | No legitimate advisor can guarantee returns; here “AI” serves merely as marketing jargon aimed at enticing larger deposits. | Investigate licensed advisors via Investor.gov and review Form CRS for any unrealistic guarantees. |
| “This STO is akin to an IPO – pre-screened and approved by regulators” | The alleged STOs lack presence in securities registries; they are mere fabrications designed for further investment solicitation. | Conduct searches on EDGAR (SEC.gov) or national securities databases; absence indicates fabrication. |
| “To withdraw you must first pay taxes/loan fees/‘investigation’ costs” | This constitutes classic advance-fee fraud; legitimate firms deduct fees rather than requiring upfront payments for fund access. | Consult licensed brokers regarding standard withdrawal procedures; report any demands for pre-payment. |
| “Send funds via wire or crypto to this wallet – your account will be credited” | This often results in direct transfers to scammers’ accounts; recovery becomes exceedingly difficult post-transfer. | Examine payee names on wires; ensure alignment with registered firms before proceeding with crypto transfers. |
| “We are investigating your account; failure to comply will result in long-term freezes” | This serves as a fear tactic designed to extract further payments without any legitimate authority over account actionability. | Verify claims independently by contacting regulatory bodies using verified contact information—not those provided in chat communications. |
A Swift Verification Process for Investors
The verification process outlined by Investor.gov is succinct yet effective—requiring less time than scrolling through a group chat:
- Pursue verification through Investor.gov using their “Check Out Your Investment Professional” tool while searching both individual names and affiliated firms.
If results yield no relevant matches or return different entities resembling similar names, consider this a red flag warranting caution.
- Elicit information on the platform itself by searching its name within SEC’s PAUSE list alongside general web inquiries using terms such as “scam,” “complaint,” or “Investor.gov alert.”
A clean PAUSE result does not guarantee legitimacy but yields definitive evidence when negative results emerge against listings on this specialized tracking program designed for unregistered entities and fake regulators.
The Timeliness of This Case Analysis
The timing surrounding this enforcement action carries significant implications within an evolving landscape where fraudsters increasingly exploit social media channels and messaging applications targeting retail investors through deceptive pitches laden with artificial intelligence elements. Recent alerts issued by Investor.gov elucidate trends indicating a rise in “long-con” relationship-based scams wherein trust is cultivated over extended periods before presenting investment opportunities—often involving cryptocurrency platforms existing solely within fraudulent operators’ control systems.
The advent of artificial intelligence lowers barriers associated with generating convincing promotional materials such as screenshots or prospectuses while simultaneously facilitating encrypted communication channels that allow scammers exclusive environments conducive for victim manipulation away from public scrutiny zones—thus enhancing scalability inherent in these fraudulent enterprises relative to earlier models that required far more hands-on management per individual victim case.
A single operator can concurrently oversee numerous WhatsApp groups under diverse identities feeding unwitting participants into identical sets of counterfeit trading venues at minimal additional costs per new recruit.
On a legal front, the SEC is pursuing permanent injunctions alongside civil monetary penalties aiming at recovering misallocated assets thereby establishing restitution pathways directed towards affected individuals should its litigation efforts prove successful.
For those who suspect engagement within similar schemes reminiscent thereof perpetrated herein described environments—the SEC along with FBI accept tips via designated online complaint channels providing avenues towards greater accountability surrounding such acts whilst contributing collective knowledge benefiting ongoing regulatory efforts.
Even absent immediate recovery prospects reporting incidents aids regulatory authorities in detecting patterns conducive towards freezing assets while potentially facilitating restitution processes benefiting future victims thereby fostering enhanced vigilance amongst prospective investors moving ahead.
The PAUSE list continues evolving dynamically reflecting emerging threats ensuring timely warnings surface effectively throughout affected communities engaging proactively against burgeoning risks associated beyond traditional investing paradigms.
