SEC Targets “Purported” Crypto Trading Platforms and Investment Clubs

The U.S. Securities and Exchange Commission (SEC) recently announced that it has filed charges against a total of seven “purported” crypto asset trading firms and investment clubs, alleging that they defrauded investors out of more than $14 million through an “elaborate investment confidence scam.” The same day, the SEC’s Office of Investor Education and Assistance issued an Investor Alert warning about these types of scams. Learn more from investment loss attorney Jake Zamansky:

SEC: Fake Businesses Offered Non-Existent “Security Token Offerings”

According to the SEC’s December 22, 2025 press release, the six “purported” entities used, “an all-too-common form of investment scam that is being used to target U.S. retail investors with devastating consequences.” The SEC’s press release identifies the six entities involved as follows:

• AI Investment Education Foundation Ltd.
• AI Wealth Inc.
• Berge Blockchain Technology Co., Ltd.
• Cirkor Inc.
• Lane Wealth Inc.
• Morocoin Tech Corp.
• Zenith Asset Tech Foundation

As alleged by the SEC, the seven defendants operated the scam from at least January 2024 to January 2025. The SEC states that the purported crypto asset trading firms would attract victims on social media and build their trust through WhatsApp group chats, where they supposedly offered AI-generated investment tips before convincing victims to invest in non-existent trading platforms. The SEC also alleges that the defendants:

• Falsely claimed to have government licenses to operate their crypto asset businesses;
• Offered non-existent “Security Token Offerings” purportedly issued by legitimate businesses; and,
• Charged victims advance fees when they attempted to withdraw their funds, which the defendants never allowed them to withdraw.

In reality, nothing about the defendants’ operations was legitimate, according to the SEC. The SEC says that after collecting more than $14 million from their victims, the defendants “funneled those funds overseas through a web of bank accounts and crypto asset wallets.”

When investors fall victim to these types of scams, they can (and should) seek accountability. While the SEC is pursuing civil charges against the defendants, there is no guarantee that the SEC’s efforts will be successful—or that they will result in recoveries for defrauded investors. While there is no guarantee that investors’ independent efforts will be successful either, investors can engage experienced legal counsel to help them pursue investment loss claims focused on recovering their individual losses.

SEC Office of Investor Education and Assistance Warns of Group Chats as a “Gateway” to Fraud

In an Investor Alert issued the same day as the SEC’s press release, the SEC’s Office of Investor Education and Assistance warns investors about the risk of group chats being a “gateway” to fraud. As the Investor Alert explains:

“[F]raudsters may use investment-related group chats, including on commonly used social media platforms, to lure investors into scams. Investors should never rely solely on information from group chats in making investment decisions. Be wary of any group chat where you receive investment advice from someone you don’t know – this is often how investment scams begin.”

The Investor Alert also highlights several other common characteristics of online investment scams. While many of these scams involve cryptocurrencies and other crypto assets, they can involve stocks and other securities as well. Red flags for these types of scams include:

• Luring investors into group chats through direct solicitation on social media;
• Using social media ads with buttons that automatically add investors to group chats;
• Claiming that group chats are led by trusted authorities, like professors or CEOs;
• Impersonating well-known individuals through AI deepfake videos;
• Promoting AI trading nodes or trading algorithms;
• Encouraging investors to set up accounts on new websites or mobile apps; and
• Demanding advance fees when investors attempt to withdraw their funds.

Along with scams that involve simply misappropriating investors’ funds (in these cases, investors’ funds are never actually invested but instead funneled into scam artists’ accounts), the Investor Alert also warns of pump-and-dump schemes that operate similarly. “Fraudsters sometimes exploit group chats to conduct pump and dump schemes — pumping up the share price of a public company’s stock by making false and misleading statements to create a buying frenzy, and then selling shares at investors’ expense.” These scams can leave investors facing losses they have no hope of recovering through ordinary market forces—and they can also provide investors with clear legal rights.

What to Do if You Fall Victim to a Social Media or Group Chat Investment Scam

With all of this in mind, investors who fall victim to social media and group chat investment scams need to act promptly. While the SEC pursues some cases, it does not pursue all; as noted above, the SEC’s pursuit of a case does not necessarily mean that investors will recover their losses.

Investors who believe that they may have fallen victim to social media and group chat investment scams should:

1. Avoid Paying “Fees” to Attempt to Withdraw Their Funds

You should avoid paying any “fees” to attempt to withdraw your funds.” These “fees” are often just another layer of fraud. To seek to recover your losses, you will most likely need to take legal action.

2. Take Screenshots and Keep Copies of All Communications

Take screenshots of social media posts, group chat messages, websites, app screens, and anything else that you think may be relevant to your investment loss claim.

3. Talk to an Investment Loss Attorney Promptly

Seeking to recover your losses from fraudulent investments will require experienced legal representation. To help maximize your chances of recovery, you should schedule a free consultation promptly.

Schedule a Free Consultation with an Investment Loss Attorney at Zamansky LLC

If you have lost money investing with a purported crypto asset trading platform, an investment club, or any other entity that you suspect may be a scam, we encourage you to contact us right away. Our attorneys represent defrauded investors nationwide. To schedule a free consultation with an investment loss attorney at Zamansky LLC as soon as possible, call 212-742-1414 or tell us how we can help online now.