The U.S. Securities and Exchange Commission has filed a wide ranging civil lawsuit accusing a group of companies and online “investment clubs” of running a coordinated crypto fraud that allegedly stole at least $14 million from retail investors.
The complaint, filed on Dec. 22, 2025, in U.S. District Court for the District of Colorado, names seven defendants tied to what regulators describe as a classic “investment confidence” scheme. The SEC says the operation relied on fake trading platforms, fabricated profits, and aggressive messaging tactics to lure victims.
According to the agency, the case reflects a growing pattern of crypto scams that blend social media recruitment, encrypted messaging apps, and false claims of regulatory approval.
Alleged scheme relied on WhatsApp groups and fake platforms
The SEC says the fraud began with online ads and social media outreach that funneled potential investors into private WhatsApp groups. There, scammers posed as experienced traders and financial educators while promoting crypto strategies described as AI driven and low risk.
Within those groups, the defendants allegedly encouraged members to open accounts on three supposed trading platforms: Morocoin Tech Corp., Berge Blockchain Technology Co., Ltd., and Cirkor Inc. The SEC claims the platforms falsely presented themselves as licensed or registered with U.S. regulators.
Once funds were deposited, investors reportedly saw dashboards showing steady gains. However, regulators say the balances and profits were entirely fabricated and designed only to build confidence and prompt larger deposits.
Fake token offerings and blocked withdrawals followed
After initial “success,” the SEC alleges the defendants pushed victims to buy sham “security token offerings” linked to companies that did not exist. Promotional materials promised high returns and exclusive access.
When investors attempted to withdraw funds, the platforms allegedly imposed surprise fees and taxes. The SEC says operators threatened account freezes or total losses unless additional payments were made.
Investigators also allege that most investor funds were quickly transferred overseas through a network of bank accounts and crypto wallets, leaving little chance of recovery once victims stopped paying.
Enforcement action fits broader SEC crackdown
The SEC is seeking permanent injunctions, civil penalties, and the return of ill gotten gains, plus interest. The agency says the lawsuit underscores its focus on retail investor protection in crypto markets.
In recent years, regulators have repeatedly warned about scams using messaging apps, fake trading apps, and false regulatory claims. The SEC says this case follows earlier actions against similar crypto confidence schemes that surged during past market cycles.
Officials continue to urge investors to verify registration claims and remain cautious of unsolicited crypto investment offers.
Source: https://coinpaper.com/13384/sec-cracks-down-on-14-million-crypto-fraud-targeting-retail-investors
