The SEC recently brought an enforcement action against persons who created a fake trading platform for crypto, in which investors were contacted through messaging apps and encouraged to deposit funds in exchange for the crypto products being offered. See, https://www.sec.gov/newsroom/press-releases/2025-144-sec-charges-three-purported-crypto-asset-trading-platforms-four-investment-clubs-scheme-targeted. While investment scams are not new, this scam brings together new elements that upend some of the indicia of trust investors should be looking for.
At CrowdCheck, we were founded on the premise of “why would anyone invest in an unknown company over the internet?” The same is true for crypto. Still, these scammers formed a real corporation in Colorado, made exempt reporting adviser filings with the SEC, and created a platform that investors could interact with. Those elements together were enough to convince investors that the opportunity was real.
What those investors didn’t realize is that the state and SEC filings did not include any regulatory oversight or approval of the business. Further, AI is changing web and software product development so that it is easy to create a realistic looking platform for users to interact with. Victims in this scam may have relied on those elements as indicia of trust to their detriment.
There are real differences between the type of activity and regulatory oversight of different categories of investment intermediaries. State filings should be backed up by confirmations of good standing. That is just a start to the due diligence necessary before making an investment in an unknown company over the internet, and is why companies and intermediaries use CrowdCheck to protect their investors and demonstrate trust when they are competing with scammers for attention.