Securities Regulation Daily Wrap Up, BLOCKCHAIN—D. Colo.: SEC charges purported crypto asset trading platforms and investment clubs with retail fraud scheme, (Jan 2, 2026)

By Kristin J. Angelino, J.D.

Defendants allegedly used fake trading platforms and fictitious security token offerings to target retail investors on social media.

The SEC filed a complaint in the District of Colorado alleging that three purported crypto asset trading platforms and four “so-called” investment clubs violated the anti-fraud provisions of the Securities Act and the Exchange Act by perpetrating a multi-step investment confidence scam that misappropriated more than $14 million from U.S. retail investors and then funneled it overseas. The complaint seeks permanent injunctions and civil penalties against all the defendants, as well as disgorgement and prejudgment interest against the purported trading platforms. (SEC v. Morocoin Tech Corp., No. 25-cv-04102 (D. Colo. Dec. 22, 2025)).

According to the SEC’s complaint, from January 2024 to January 2025, defendants perpetrated a multi-step fraud scheme against retail investors using social media. In the first step, defendants AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation, Ltd., and Zenith Asset Tech Foundation (collectively, the Club Defendants) operated so-called investment clubs in group chats on WhatsApp, where fraudsters posing as experienced financial professionals gave purported investment recommendations to investors and promised substantial profits from AI-generated investment tips.

After the Club Defendants gained the investors’ confidence, the next step involved recommending that investors trade crypto assets by opening accounts on purported crypto asset trading platforms operated by defendants Morocoin Tech Corp., Berge Blockchain Technology Co., Ltd., and Cirkor Inc. (collectively, the Platform Defendants). In the next step, the Club Defendants and Platform Defendants (collectively, the Defendants) offered fictitious “Security Token Offerings” (STOs) purportedly issued by legitimate businesses. The final step involved Defendants further defrauding investors by demanding that investors pay advance fees before they could withdraw any purported funds in their accounts. The approximately $14 million that was misappropriated was eventually funneled overseas through various bank accounts and crypto asset wallets.

“This matter highlights an all-too-common form of investment scam that is being used to target U.S. retail investors with devastating consequences,” said Laura D’Allaird, Chief of the SEC’s Cyber and Emerging Technologies Unit.

Fake investment clubs. The SEC’s complaint alleged that the Club Defendants solicited retail investors through social media ads to join several investment clubs that were “essentially no more than WhatsApp groups that provided purported investment recommendations from purportedly experienced financial professionals.” Some of the ads even featured deepfake videos of well-known financial experts. For each club, a purported “professor” sent updates to investors on macroeconomic conditions or commentary on stocks. The professors also sent trade recommendations that they falsely claimed were based on AI-generated signals.

Fake trading platforms. As further alleged, the investment club’s professors and their “assistants” promoted crypto asset trading to the retail investors in the WhatsApp group chats and directed them to open accounts on the three trading platforms of the Platform Defendants. Each of the platforms had a user interface that mimicked the features and functionality of a legitimate crypto asset trading platform, including facilitating purported transactions and posting investor account balances. In reality, the platforms were not genuine trading platforms and no trading took place there.

Defendants allegedly also made false claims about the Platform Defendants’ corporate and regulatory registrations and supposed security features. Regarding registrations, the SEC’s complaint stated that, contrary to the Platform Defendants’ claims, they did not hold any licenses from the SEC or the National Futures Association, and the registrations that the Platform Defendants did hold from FinCEN’s Money Services Bureau and the state of Colorado did not mean that the Platform Defendants were compliant or legitimate. In addition, the claimed security features described on the Platform Defendants’ websites did not exist.

Fake STOs. The SEC’s complaint further alleged that the Defendants promoted STOs purportedly issued by legitimate businesses, equated them to stock IPOs, and told investors that the STOs were the best way investors could either earn greater profits or make back losses. To fund their STO purchases, investors used the balance of their trading accounts or deposited outside funds and/or took out purported loans. In reality, the STOs and their purported issuing companies were fictitious.

Charging advance fees. Finally, the SEC’s complaint alleged that Defendants charged advance fees—a fraudulent upfront fee in advance of receiving any proceeds—to investors who wanted to withdraw their purported trading profits. The advance fees took several different forms. In one form, the Defendants told investors wishing to withdraw money that they had to first repay the purported loans that they had taken out to fund their investments, using money from outside their trading accounts. Defendants also solicited fraudulent advance fees based on claims of fictitious government investigations. Claiming that investor funds were in imminent danger of being frozen due to a regulatory investigation, Defendants told investors that they would expedite their withdrawal requests if the investors paid additional fees using money from outside their trading accounts. Although many investors paid advance fees, no investor was able to withdraw any of their money.

Violations and relief requested. The SEC’s complaint charged the Platform Defendants with violating the antifraud provisions of Section 17(a) of the Securities Act, the Club Defendants with violating Sections 17(a)(1) and (3) of the Securities Act, and it charged Defendants with violating the antifraud provisions of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The complaint seeks permanent injunctions and civil penalties against all defendants, as well as disgorgement and prejudgment interest against the Platform Defendants.

The case is No. 25-cv-04102.

Attorneys: Christopher R. Kelly for the SEC.

Companies: Morocoin Tech Corp.; Berge Blockchain Technology Co., Ltd.; Cirkor Inc.; Ai Wealth Inc.; Lane Wealth Inc.

LitigationEnforcement: Blockchain Enforcement FraudManipulation InvestmentAdvisers SECNewsSpeeches