SEC Cracks Down on $14M Crypto & AI Investment Scam - Fake Platforms Exposed

Regulators just dropped the hammer on a sophisticated digital deception scheme.

The Phantom Platforms

Forget flashy websites and whitepapers. This operation built elaborate facades—complete crypto trading platforms and exclusive AI investment clubs that promised the moon. They didn't just talk a big game; they constructed an entire virtual ecosystem designed to siphon funds from hopeful investors.

The $14 Million Mirage

The staggering figure tells the story: over fourteen million dollars vanished into the digital ether. The scheme leveraged the twin buzzwords of our era—cryptocurrency and artificial intelligence—to create an aura of cutting-edge legitimacy. It was a masterclass in exploiting hype for pure profit.

Enforcement Wakes Up

The SEC's move signals a clear shift. As the crypto landscape matures, watchdogs are increasingly cutting through the noise to target outright fraud. This action bypasses debates over token classification to go straight for the old-school con artists wearing new-tech masks. It's a reminder that while the tools change, the game of separating fools from their money remains frustratingly consistent.

For the industry, it's a painful but necessary spotlight. Every crackdown on a fake platform makes a little more room for the real builders. Just remember, if an "AI-powered crypto club" promises guaranteed returns, it's probably powered by something far less intelligent: greed.

SEC: AI-Themed Crypto Scam Lured Investors Through Social Media and WhatsApp

According to the SEC, the scheme operated from at least January 2024 through January 2025.

The investment clubs allegedly recruited investors through ads on social platforms and then moved conversations to WhatsApp groups, where fraudsters posed as financial professionals.

In those chats, they promoted what were described as AI-generated investment tips to build credibility and trust.

Once investors were engaged, they were directed to open and fund accounts on Morocoin, Berge and Cirkor, which the SEC says falsely claimed to be licensed crypto trading platforms.

The defendants also allegedly offered “security token offerings” that were presented as being issued by legitimate companies.

In reality, regulators say no trading ever occurred, the platforms were fake, and neither the token offerings nor their issuing companies existed.

AI-powered crypto scams are up over 450% in the past year. It’s proof that automation without auditability opens new attack surfaces.

At Inference Labs we say: if an AI acts, it must leave a trace.
No trust, just proof.

When investors attempted to withdraw funds, the SEC alleges the defendants imposed additional hurdles, including demands for advance fees, further draining victims’ accounts.

In total, at least $14 million was misappropriated from US-based retail investors and routed overseas through a network of bank accounts and crypto wallets, according to the complaint.

“This matter highlights an all-too-common FORM of investment scam,” said Laura D’Allaird, chief of the SEC’s Cyber and Emerging Technologies Unit. She said the case shows how fraudsters are using AI-related claims and crypto narratives to target retail investors.

The SEC charged the defendants with violating anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The agency is seeking permanent injunctions, civil penalties and disgorgement with interest.

SEC Scales Back Crypto Enforcement as Trump Returns to Office

As reported, the SEC has significantly reduced its enforcement activity against the cryptocurrency industry since President Donald Trump returned to office.

Nearly 60% of crypto-related cases have been dropped, paused or dismissed, even as enforcement actions in traditional financial markets continue largely unchanged.

High-profile cases affected by the pullback include the SEC’s long-running lawsuits against Ripple Labs and Binance.

At the same time, changes at the top of the SEC are set to further reshape the agency’s stance.

Paul Atkins, a Republican appointee seen as more receptive to market-driven regulation, is expected to remain chair for the foreseeable future. However, the commission is preparing to lose its final Democratic member.