In a most cunning con, the SEC unmasked a sinister scheme where AI-driven investing advice was the bait for unsuspecting investors. π§ββοΈπΈ
The SEC, with a twinkle in its eye, accused seven firms of swindling investors out of a staggering 14 million dollars. On December 22, 2025, they declared the intricate confidence scam, which lured victims with social media ads and WhatsApp group chats. π¨
Morocoin Tech Corp., Berge blockchain technology Co. Ltd., and Cirkor Inc. operated fraudulent crypto trading platforms. The investment clubs were run by AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd., and Zenith Asset Tech Foundation. They vowed to make a buck on AI-generated tips, which, if you ask me, sounds like a recipe for disaster. π€‘
WhatsApp Groups: The Perfect Cover for a Sly Scheme
The plot was between January 2024 and January 2025. Investment clubs were promoted through social media and invited members to WhatsApp where fraudsters masqueraded as financial experts. The groups established trust and then referred investors to the fraudulent sites, all while whispering promises of riches. π±π°
Laura DβAllaird, Chief of the Cyber and Emerging Technologies Unit of the SEC, said the fraud was against American retail investors and with grave repercussions. The multi-step approach incorporated AI hints as bait, and victims were putting money into systems that said they had government licenses. π§©
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Fake Security Tokens: A Chocolate Teapot of Deception
The sites provided Security Token Offerings, which were as real as a chocolate teapot. π« As noted in the SEC complaint, no actual trades were made. There were no token offerings and the companies themselves were fictional with the sites showing fake account balances to give the illusion of legality. π
Investors experienced additional fraud when they attempted to withdraw money. The defendants requested upfront fees prior to the release of funds, like a magician asking for a tip before revealing the trick. πΈ Bank accounts and cryptocurrency wallets were used to transfer stolen money overseas, and retail investors in the United States lost at least $14 million. π
The SEC filed the charges in the U.S. District Court in the District of Colorado. The anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934 were breached by the defendants. SEC is pursuing a permanent injunction and civil penalties against all defendants. π‘οΈ
Regulators Warn: Social Media is a Labyrinth of Lies
The Office of Investor Education and Assistance of the SEC released a warning. Popular social media platforms and messaging applications are also being exploited by fraudsters. Investors must not depend solely on group-chat data. Background Investor.gov checks can make sure who is selling what. π§
The complaint requests that Morocoin, Berge, and Cirkor restore misappropriated funds and pay prejudgment interest. All seven defendants will face civil penalties. The SEC restated its efforts in combating securities fraud, and retail investor protection is a priority area of enforcement. π΅οΈββοΈ
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2025-12-28 20:15