The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against an extensive fraud network allegedly involved in collecting investments through social media advertisements, fake cryptocurrency trading platforms, and WhatsApp groups. The SEC reported that over 14 million dollars were lost by predominantly U.S.-based individual investors. Allegedly, the operation persisted from January 2024 to January 2025, gradually building trust through promises of easy profits. The SEC stated that funds were moved overseas through a complex network of bank accounts and cryptocurrency wallets.
Fake Platforms and WhatsApp Clubs Fueling the Traffic
According to the SEC’s complaint, three entities claimed to operate platforms for cryptocurrency trading: Morocoin Tech, Berge Blockchain Technology, and Cirkor. Investors were initially targeted through advertisements on popular social media channels. These ads emphasized promises of easy profits and advanced, AI-backed investment tips. Interested users were then invited to join WhatsApp group chats.
Within these groups, scammers posed as experienced financial professionals, offering AI-backed trading advice and gradually establishing trust. Once trust was secured, investors were urged to open accounts and deposit funds on the platforms supposedly managed by Morocoin, Berge, and Cirkor. The SEC added that these platforms were misleadingly presented as licensed and regulated entities, even falsely claiming governmental approval.
Furthermore, four entities marketed as investment clubs were implicated in this scheme by promoting Security Token Offerings (STOs) under fictitious names such as AI Wealth, Lane Wealth, AI Investment Education Foundation, and Zenith Asset Tech Foundation. According to the complaint, it was falsely represented that the STOs were linked to real companies. In reality, neither the companies nor the offerings existed, with no actual trading occurring on the platforms.
Investors Denied Withdrawal of Funds
The SEC noted that when investors attempted to withdraw funds, a secondary pressure mechanism was activated. Additional upfront fees were demanded for the withdrawal process. The SEC highlighted this demand as a common method used to exacerbate losses in fraudulent schemes. The complaint alleged that investor funds were ultimately misappropriated entirely and redirected overseas through a network of accounts and wallets.
Laura D’Allaird, Chief of the SEC’s Cyber and Emerging Technologies Unit, described a multi-step plan where initial contact via social media ads evolved into gaining trust through assuming finance professional roles in WhatsApp chats. Subsequently, funds were transferred to fraudulent cryptocurrency platforms for misuse. According to the agency, the key element was the technology-aided perception of expertise targeting investor psychology.
Furthermore, the expansion of AI-supported fraud techniques was highlighted. Deepfake videos convincingly associating known figures like Elon Musk with fake investment advice were created, bypassing KYC controls, producing fake customer support correspondence, and cloning platform panels were some methods employed. In some scenarios, malicious software links were sent via Zoom invitations.
