The U.S. Securities and Exchange Commission has filed charges against several companies and investment clubs it says were involved in an elaborate cryptocurrency fraud that took more than $14 million from retail investors.
The complaint names crypto asset trading platforms Morocoin Tech Corp., Berge Blockchain Technology Co., Ltd., and Cirkor Inc., and investment clubs AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd. (AIIEF), and Zenith Asset Tech Foundation. The SEC alleges the groups used social media advertisements and messaging app groups to build trust and recruit investors.
The SEC says the clubs operated on WhatsApp and presented members with personas such as a “professor” and an “assistant” who provided market commentary and purported AI-generated trading signals. Investors were directed to open and fund accounts on purported trading sites, which the complaint identifies as h5.morocoin[.]top (Morocoin), www.bergev[.]org (Berge) and www.cirkortrading[.]com (Cirkor); the filing lists various registration dates and notes delinquent or dissolved statuses for those platforms.
The complaint alleges the groups promoted Security Token Offerings (STOs) for crypto assets called SCT and HMB, purportedly issued by SatCommTech and HumanBlock respectively, and that those issuing companies were fictitious and no actual trading took place on the platforms. When investors tried to withdraw funds, the filing says the sites demanded advance fees and then cut off access to accounts.
The SEC alleges at least $14 million was misappropriated and moved overseas through bank accounts and crypto wallets, with roughly $7.4 million in crypto assets and $6.6 million in fiat currency. The complaint includes examples such as a Morocoin investor who made seven wires totaling more than $1 million to accounts in China and Hong Kong and a Cirkor investor who wired over $1.4 million to a bank in Indonesia. There have been multiple reports on Reddit about losses tied to the scheme and a thread showing the AIIEF using names like those.
The defendants are charged with violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934; the SEC is seeking permanent injunctions, civil penalties and repayment of funds with prejudgment interest. Laura D’Allaird, chief of the SEC’s Cyber and Emerging Technologies Unit, said the case highlights a common form of investment scam targeting U.S. retail investors.
The SEC complaint also alleges an unnamed individual based in Beijing paid to register several of the investment clubs; that identity is not disclosed in the filing.