SEC sues crypto platform for AI fraud, retail investors lose $14 million

According to financefeeds, the U.S. SEC has filed a lawsuit against three cryptocurrency platforms and four investment firms for allegedly collaborating to defraud at least $14 million.

The parties involved began attracting investors to join WhatsApp groups via social media starting in January 2024, claiming to offer AI trading strategies and guiding victims to open accounts on platforms such as Morocoin, Berge, and Cirkor. These platforms only displayed fake balances and trading records, with no real trades actually occurring.

When investors attempted to withdraw funds, the scammers demanded more money under the guise of taxes, processing fees, and other charges. Laura D'Allaird, head of the SEC's cyber unit, stated that fraud is fraud, regardless of the technology used to disguise it. The SEC has filed a lawsuit in the U.S. District Court for Colorado seeking a permanent injunction and civil penalties.