The US regulator identified a fraud scheme that raised at least $14 million through social media and messaging apps and launched legal action against seven entities involved.
Regulatory scrutiny of the crypto market in the United States continues, with authorities now focusing on investment groups organized via social media. The U.S. Securities and Exchange Commission said it uncovered a large scale fraud operation targeting retail investors and filed an official complaint with the Colorado District Court.
According to the regulator, the scheme operated between January 2024 and January 2025. Victims were lured through social media advertisements into so called investment clubs and later directed to messaging app groups where individuals posing as financial experts shared guidance. Artificial intelligence themed investment tips were used to build trust and create the illusion of steady returns.
As the scheme progressed, investors were instructed to open accounts and deposit funds on fake crypto trading platforms that did not actually exist. They were later offered fictional security token sales, while those attempting to withdraw funds were asked to pay additional fees and taxes, deepening their losses. The SEC stated that at least $14 million was transferred to overseas bank accounts and crypto wallets.
The regulator also issued a public warning, urging investors to remain cautious about offers shared through social media and group chats, and to verify the background of anyone providing investment advice through official channels.
