The SEC continues efforts on multiple fronts to modernize the regulatory framework for digital assets with several new forms of guidance issued in Q4, as discussed in other posts. Notwithstanding those efforts, the SEC does continue to bring enforcement actions related to fraudulent activities involving crypto assets, as discussed below, in another separate crypto asset venture fund post (see Shima Capital Management), and with respect to a broader fraud scheme including crypto assets (see Nathan Gauvin).

In December, the SEC filed charges against three purported crypto asset trading platforms (Morocoin Tech Corp., Berge Blockchain Technology Co. Ltd., and Cirkor Inc.) and four investment clubs (AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd., and Zenith Asset Tech Foundation) alleging that they defrauded retail investors out of more than $14 million in an elaborate scam. According to the Chief of the SEC's Cyber and Emerging Technologies Unit, the complaint "alleges a multi-step fraud that attracted victims with ads on social media, built victims’ trust in group chats where fraudsters posed as financial professionals and promised profits from AI-generated investment tips, then convinced victims to put their money into fake crypto asset trading platforms where it was misappropriated." She reiterated "fraud is fraud, and we will vigorously pursue securities fraud that harms retail investors.” See https://www.sec.gov/newsroom/press-releases/2025-144-sec-charges-three-purported-crypto-asset-trading-platforms-four-investment-clubs-scheme-targeted.

In another December enforcement action, the SEC charged Danh C. Vo, founder and CEO of VBit Technologies Corp., with fraudulently raising over $95.6 million from approximately 6,400 investors and misappropriating $48.5 million of investor funds in connection with his bitcoin mining business called “VBit.” The SEC alleged that Vo solicited investors and lied to them about VBit's business. According to the complaint, Vo offered and sold “Hosting Agreements” that purported to provide investors with a passive income stream through bitcoin mining—the process of using high-speed computers (known as “mining rigs”) to solve complex algorithms to validate and secure transactions on the blockchain and earn bitcoin. However, such agreements were apparently sold for many more mining rigs than VBit was actually operating. Vo was further charged with misappropriating millions for gambling debts and personal gifts before fleeing the U.S. The case is being litigated with other U.S-based family members named as relief defendants who have consented to disgorgement of ill-gotten gains. See https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26448.

In an ongoing high-profile case, the SEC proposed final consent judgments against two former FTX executives and a former executive of Alameda Research, a crypto asset hedge fund owned by the two executives and Samuel Bankman-Fried that was entangled in the FTX scandal. The three individuals consented to permanent injunctions from similar violations, as well as 5-year conduct-based injunctions and 8 or 10-year officer-and-director bars. See https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26450.