A number of businesses have been charged by the SEC for allegedly participating in a complex cryptocurrency scam. According to the SEC, the scam was a multi-step fraud that used social media advertisements to trick unsuspecting users and group chats to gain their trust. After persuading the victims to invest their money in fictitious cryptocurrency asset trading platforms, the scammers later deceived them.
Through a network of bank accounts and cryptocurrency asset wallets, the illicit proceeds—which totaled at least $14 million—were transferred abroad, sometimes via accounts owned by Chinese or Burmese people in Southeast Asia. In one instance, a Morocoin investor sent over $1 million to accounts in China and Hong Kong via seven different wires. The According to the complaint, the registrations of AI Wealth, Lane Wealth, and Zenith were paid for by an unidentified Beijing, China-based individual.
In addition to the repayment of the funds with prejudgment interest, the SEC is requesting civil penalties and permanent injunctions. The defendants are accused of breaking the Securities Act of 1933 and the Securities Exchange Act of 1934's anti-fraud provisions. The AIIEF has been accused of using names like "Richard Dill" and "Daisy Akemi" for instructors and assistants, and there have been numerous reports on Reddit about people losing money to the scam.
"This issue draws attention to an all too prevalent type of investment fraud that targets American retail investors with disastrous results, according to Laura D'Allaird, Chief of the Cyber and Emerging Unit of Technologies. In another, a Cirkor investor sent more than $1.4 million to an Indonesian bank. "We will vigorously pursue securities fraud that harms retail investors because fraud is fraud," she declared.