On Dec. 11, the U.S. Securities and Exchange Commission (SEC) charged three people with faking securities brokers and investing advisers in order to carry out a digital asset scheme.
The complaint names 3 Nigerian nationals. Allegedly, their actions have diverted over $2.9 Million from at least 28 Investors by leading them to fraudulent platforms. After that they instructed the investors to buy Bitcoins at legitimate brokers or crypto exchanges then transfer the funds into blockchain addresses associated with the defendants.
The SEC claims that the defendants used software to alter their voices, online group chats, and social media in order for them to gain trust and generate interest about their purported expertise.
According to an Investor.gov Alert, impersonation frauds are getting more sophisticated as a result of technological advancements. This includes the use deepfake video or audio. In this particular case, the alleged scam encouraged investors to look up public records for real investment professionals.
They then create fake accounts that show unrealized gains to encourage victims into contributing additional money. Participants saw claims of monthly returns up to 25 percent, but funds weren’t invested and withdrawals were met with additional fees.
Regulatory units with crypto-specific mandates, including the SEC’s Crypto Assets and Cyber Unit, were involved, indicating that such enforcement actions increasingly target areas where traditional fraud methods intersect with decentralized financial networks and digital asset platforms.
Voice-changing software and spoofed phone numbers made it difficult for investors to verify identities, and the perpetrators’ use of encrypted messaging apps and social platforms allowed them to operate outside traditional brokerage environments. The SEC’s asset tracking was complicated by their reliance on Bitcoin and other digital assets.
According to the SEC report, defendants used chat groups and forums, third-party comments, as well as online domain names, in order for their false personas to be noticed.
Investors were directed, according to the complaint to download apps that claimed to access unique trading strategies or algorithms, but no real activity was performed. The funds were instead quickly moved, and made unrecoverable.
The SEC, working in parallel with the U.S. Attorney’s Office for the District of New Jersey has charged all three defendants with multiple violations of federal securities laws and seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties.
In an alert prepared by the Office of Investor Education and Advocacy in conjunction with the FBI it is recommended that you verify your identity through public databases and sources such as Form CRS, avoid using unverified contact information, and maintain heightened awareness when asked to send money via cryptocurrency.
The SEC’s legal action and the related investor warning reflect an enforcement environment adapting to evolving tactics that leverage crypto markets. The agency’s complaint, filed in the U.S. District Court for the District of New Jersey, requests penalties and remedies designed to halt further misconduct and recover stolen funds.
Posted In: Bitcoin, US, Crime, Featured, Scams Author 
Liam ‘Akiba’ Wright
Also known by “Akiba,” Liam Wright, a journalist, is also a podcast producer and the Editor-in Chief at CryptoSlate. He believes decentralized technology can bring positive changes to the world.
Liam@@akibablade.com LinkedIn Editor
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