SEC Charges 3 Exchanges, 4 Clubs in $14M Pyramid Scheme: Daily Crypto Analysis

• The SEC has charged three cryptocurrency exchanges and four investment clubs with orchestrating a $14 million pyramid scheme.
• Market structure suggests this enforcement action is part of a broader regulatory pattern targeting fraudulent AI-based investment schemes.
• Technical analysis indicates Bitcoin is testing key support at $86,500 amid extreme fear sentiment (24/100).
• Historical comparison shows similar regulatory actions in 2021 preceded market consolidation phases lasting 6-8 weeks.

VADODARA, December 24, 2025 — The U.S. Securities and Exchange Commission has filed charges against three cryptocurrency exchanges and four investment clubs in connection with an alleged $14 million pyramid scheme, according to an announcement today. This daily crypto analysis examines the market implications of regulatory enforcement amid extreme fear conditions, with Bitcoin trading at $87,285, down 1.67% in 24 hours.

Market Context & Background

Market structure suggests this enforcement action mirrors patterns observed during the 2021 regulatory crackdown. Following the SEC's Operation Crypto Sweep in Q3 2021, which targeted 80 fraudulent schemes, Bitcoin consolidated between $40,000 and $48,000 for seven weeks before resuming its upward trajectory. The current environment shows similar characteristics: regulatory pressure coinciding with technical weakness. The Crypto Fear & Greed Index has stagnated at 24, indicating extreme fear that typically precedes liquidity grabs. On-chain data indicates institutional accumulation continues despite retail panic, creating a potential Fair Value Gap between current prices and intrinsic value.

Related developments in this regulatory environment include analysis of the Crypto Fear & Greed Index stagnation at 24 and unconfirmed reports of Russian crypto investment amid similar market conditions.

What Happened?

According to the SEC complaint filed today, the regulatory agency has charged Morocoin Tech Corp., Berge Blockchain Technology Co. Ltd, and Cirkor Inc. as the three cryptocurrency exchanges involved in the alleged scheme. The four investment clubs named are AI Wealth Inc, Lane Wealth Inc., AI Investment Education Foundation Ltd, and Zenith Asset Tech Foundation. The SEC alleges these entities posed as financial experts, promising profits from AI-based investments to lure victims into trading on fraudulent cryptocurrency exchanges. The investigation found the scheme defrauded investors of $14 million through multi-level marketing tactics. This action follows the SEC's increased focus on cryptocurrency fraud, with Chair Gary Gensler emphasizing investor protection in multiple public statements this quarter.

Technical Analysis & Price Action

Bitcoin's price action shows it testing the $86,500 support level, which represents the 0.382 Fibonacci retracement from the November high of $94,200. The 50-day moving average at $88,100 has been breached, creating a potential Order Block between $86,500 and $87,800. RSI sits at 42, indicating neither overbought nor oversold conditions, but the Volume Profile shows increased selling pressure at the $88,000 level. Market structure suggests the $86,500 support represents a critical Bullish Invalidation level—a break below this point would invalidate the current consolidation thesis and potentially trigger a move toward $82,000. Conversely, the Bearish Invalidation level sits at $89,500, where a sustained break above would signal resumption of the broader uptrend.

By The Numbers

Why It Matters

For institutional investors, this enforcement action represents continued regulatory clarity that ultimately benefits legitimate market participants. The SEC's specific targeting of AI-based investment schemes follows similar actions against AI-powered trading platforms in 2024, establishing a pattern of scrutiny around algorithmic investment promises. Retail investors face increased counterparty risk assessment requirements, as fraudulent exchanges typically exhibit poor KYC/AML compliance—a red flag that sophisticated investors monitor through on-chain analytics. The $14 million scale, while significant, represents less than 0.01% of daily cryptocurrency trading volume, suggesting systemic impact is limited but psychological effects may be amplified by current market sentiment.

Community Sentiment

Market analysts on X/Twitter have noted the timing coincidence with extreme fear conditions. One quantitative researcher observed, "SEC actions during fear periods typically create temporary sell-offs followed by stabilization within 72 hours." Another analyst commented, "The AI investment angle is particularly concerning—similar to the 2021 DeFi yield farming schemes that promised algorithmic returns." Bulls point to historical precedent where regulatory actions against fraudulent entities preceded market bottoms, while bears emphasize the potential for further enforcement actions to pressure prices.

Price Prediction / Future Outlook

Bullish Case: If Bitcoin holds the $86,500 support and regulatory clarity reduces fraudulent competition, a relief rally toward $92,000 is probable within 2-3 weeks. Historical patterns indicate that after similar SEC actions in 2021, Bitcoin gained 18% over the subsequent month as legitimate capital re-entered the market. The Bullish Invalidation level remains $86,500—a sustained break below would negate this scenario.

Bearish Case: Continued regulatory pressure combined with failure to hold $86,500 support could trigger a Gamma Squeeze downward, targeting the next significant support at $82,000 (the 0.618 Fibonacci level). This would represent a 6% decline from current levels and potentially extend the extreme fear period. The Bearish Invalidation level is $89,500—a break above would signal the bear case has been invalidated.

FAQs

What exchanges did the SEC charge?The SEC charged Moroccoin Tech Corp., Berge Blockchain Technology Co. Ltd, and Cirkor Inc.

How much money was allegedly defrauded?The SEC alleges the scheme defrauded investors of $14 million.

What was the method of the alleged fraud?The groups allegedly posed as financial experts promising profits from AI-based investments to lure victims into trading on fraudulent exchanges.

How does this affect Bitcoin's price?Market structure suggests regulatory actions during extreme fear periods typically create temporary selling pressure followed by stabilization within 72 hours.

What should investors watch for next?Monitor Bitcoin's ability to hold $86,500 support and any further SEC announcements regarding cryptocurrency enforcement actions.

Source Note: Market data and factual reporting in this article are sourced from original reports. Commentary and analysis provided by CoinMarketBuzz.