SEC Targets WhatsApp-Based Crypto Scams That Cost Investors $14 Million

Chainalysis estimated $40.9 billion in losses from crypto scams in 2024 and expects the numbers to increase further in 2025.

• Regulators charged four fake investment clubs and three sham trading platforms with defrauding investors via social media marketing and messaging applications.
• The SEC wants injunctions, penalties, and disgorgement, although the accused have not been sentenced.
• Other crypto fraud convictions include the roughly six-year prison sentence of an IcomTech promoter.

The U.S. Securities and Exchange Commission (SEC) on Monday charged four fake investment clubs that used WhatsApp ads to lure investors.

SEC regulators said the four investment clubs used advertisements and messaging applications such as WhatsApp to entice investors into fraudulent "investment clubs" that promised rewards from AI-generated crypto trading methods, even though no actual trading took place.

The charge sheet named AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd., and Zenith Asset Tech Foundation as investment clubs allegedly involved in the scheme, along with Morocoin Tech Corp., Berge Blockchain Technology Co. Ltd., and Cirkor Inc. as fake trading platforms.

According to the file, these falsely purported to be licensed and provided fictitious "security token offerings" associated with non-existent organizations. Investors were enticed to open and fund accounts, but were then charged additional "fees" for withdrawing funds. The agency seeks permanent injunctions, civil fines, and disgorgement.

“This matter highlights an all-too-common form of investment scam being used to target U.S. retail investors,” said Laura D’Allaird, chief of the SEC’s Cyber and Emerging Technologies Unit, in the agency’s statement. The accused have not been criminally convicted; the SEC is seeking civil injunctions, penalties, and disgorgement.

Crypto Scams Continue To Surge

This case comes amid continued warnings from U.S. authorities about crypto-related fraud targeting retail investors. Last week, a federal court sentenced IcomTech promoter Magdaleno Mendoza to nearly six years in prison for his role in a cryptocurrency Ponzi scheme that defrauded investors through fake crypto mining and trading operations.

According to Chainalysis' Crypto Crime Report, illicit activity across the crypto ecosystem resulted in approximately $40.9 billion in losses in 2024, with high-yield investment scams remaining a concern. Chainalysis said in the report that 2025 will likely see a rise in crypto scams. 

At the time of writing, the total crypto market cap stood over $3 billion, with Bitcoin trading at $87,098, down 0.5% over the past day. On Stocktwits, retail sentiment around Bitcoin remained in ‘extremely bearish’ territory, accompanied by ‘normal’ levels of chatter over the past day.

Read also: Coinbase Shares Under Pressure Despite Solana-Base Bridge And Prediction Market Entry

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