Yeliz Akmaca 
The U.S. Securities and Exchange Commission (SEC) has filed a sweeping lawsuit against a new generation of investment fraud spreading across social media in the crypto market. According to the SEC, the defendants collected at least $14 million from U.S. retail investors through fake crypto trading platforms and investment clubs. The case reveals how AI-themed investment promises evolved into a systematic trust trap.
How Fake Crypto Platforms and Investment Clubs Operated
According to the SEC’s complaint, the fraud scheme gradually took shape between January 2024 and January 2025. The perpetrators launched the process through advertisements posted on popular social media platforms. These ads promoted easy profits, low risk, and AI-powered trading strategies.
They directly invited interested users into investment groups created on WhatsApp. At this stage, the scammers introduced themselves as experienced financial experts. Alleged AI-based trading tips shared in group chats reinforced investor confidence. Over time, the structure created the perception of a closed and “exclusive” investment club.
No Real Trades, No Real Companies
After gaining trust, investors were guided to open accounts on supposed crypto platforms operating under the names Morocoin Tech Corp., Berge Blockchain Technology Co. Ltd., and Cirkor Inc. The scammers claimed these platforms were government-licensed and legally regulated. The SEC states that these claims were entirely false.
According to the complaint, no real trading activity ever occurred on these platforms. The products offered under the label of “Security Token Offering” had no real backing. The SEC revealed that the companies allegedly issuing these tokens did not exist in reality. Demanding additional fees from investors seeking withdrawals marked the final stage of the scheme.
AI-Driven Fraud Tactics
Alongside AI-generated investment advice, the use of deepfake videos increased rapidly. Scammers relied on artificial intelligence to create realistic videos showing well-known figures such as Elon Musk seemingly endorsing fake investment schemes.
The same actors used AI-based tools to bypass KYC checks, impersonate customer support interactions, and replicate trading dashboards to appear legitimate. In some cases, scammers expanded their attack surface by exploiting Zoom meetings through fake invitations containing malware.
Why It Matters: Behavioral Breakdown and Market Risk
This case demonstrates that crypto fraud has become not only a technical threat but also a behavioral one. AI narratives, social proof, and closed-group dynamics weaken investors’ critical judgment. Such schemes tend to spread faster during periods of regulatory uncertainty.
The SEC’s action signals that regulators may target not only fake platforms but also entities operating under labels such as “investment education” or “AI-powered clubs.” This development increases regulatory risk for similar models across the crypto ecosystem.
Regulatory Action and Legal Claims
The SEC filed the lawsuit in the U.S. District Court for the District of Colorado. The agency alleges that the defendants violated the anti-fraud provisions of the Securities Act and the Exchange Act. The SEC seeks permanent injunctions, civil penalties, and the return of ill-gotten gains with interest.
The SEC’s investor education unit also issued a separate warning urging caution toward investment offers circulating on social media and messaging apps. As the case progresses, the SEC will closely monitor whether to expand oversight of AI-themed investment clubs and similar crypto platforms, keeping broader enforcement options on the table.
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