SEC Exposes $14 Million Crypto Fraud Using Fake AI Tips and WhatsApp Investment Clubs

The complaint alleges that seven entities misused AI buzzwords and crypto promises to defraud U.S. retail investors out of $14 million.

The U.S. Securities and Exchange Commission (SEC) has charged three entities claiming to operate crypto asset trading platforms, along with four so-called investment clubs, for allegedly running a massive fraud that targeted retail investors via social media.

According to the SEC, Morocoin Tech Corp., Berge Blockchain Technology Co. Ltd. and Cirkor Inc., together with AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd. and Zenith Asset Tech Foundation, embezzled more than $14 million from mostly US-based investors. The regulator said the scheme operated from at least January 2024 to January 2025 and followed a familiar pattern seen in many modern online investment scams.

Fake crypto platforms, real losses

The SEC claims that the defendants first attracted victims using advertisements on popular social media platforms, promising easy profits and sophisticated AI-generated investment advice. Interested users were then invited to join WhatsApp group chats, where scammers posed as experienced financial professionals and slowly built trust by sharing what they believed were successful AI-powered trading tips.

Once investors were convinced, they were encouraged to open accounts and deposit funds on so-called crypto trading platforms from Morocoin, Berge and Cirkor. These platforms claimed that they were properly licensed and regulated, and made false statements about government approval.

The SEC says this was not true. The complaint further alleges that the investment clubs promoted fake “Security Token Offers,” which they said were linked to real companies. In reality, no such companies or offerings existed, and no actual trading ever took place on the platforms.

When investors later tried to withdraw their money, the defendants reportedly demanded additional upfront fees, a tactic often used to extract even more money from victims. According to the agency, all investor funds were eventually embezzled and funneled abroad through a complex network of bank accounts and crypto wallets.

In a statement, Laura D’Allaird, head of the SEC’s Cyber ​​and Emerging Technologies Unit, said

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“Our complaint alleges a multi-step fraud that attracted victims with social media advertisements, built victims’ trust in group chats where fraudsters posed as financial professionals and promised profits from AI-generated investment tips, and then convinced victims to put their money into fake cryptocurrency trading platforms where it was embezzled.”

AI-powered fraud

In addition to AI-generated investment advice, AI deepfakes have also increased significantly. Scammers are increasingly using artificial intelligence to create realistic videos that appear to show public figures, such as X owner Elon Musk, endorsing fake investment schemes on social media. Scammers are also abusing AI to bypass KYC checks, make customer support calls, and replicate platform dashboards to look legitimate.

In some cases, they have even abused Zoom meetings by sending fake invitations containing links to malicious software.