Seattle —
Regulators in Washington state have accused a network of deceptive investment education foundations and cryptocurrency trading platforms of luring victims through social media and messaging apps, leading to losses of around $9.9 million for investors.
The Washington State Department of Financial Institutions (DFI) submitted a complaint on Wednesday detailing allegations of various securities law violations and fraudulent activities related to virtual currencies from 2024 to 2025, specifically involving foundations like the Zenith Asset Tech Foundation.
DFI claims that these fraudsters executed a complex cryptocurrency scam utilizing fake educational institutions, fraudulent securities token offerings, AI-generated investment signals, and illegitimate trading platforms.
At least 38 investors were identified, including three from Washington who collectively invested roughly $49,000, resulting in significant losses close to $9.9 million.
DFI Secretary Charlie Clark stated, “Now more than ever, it’s crucial for regulators like DFI to take action to safeguard people’s savings.” According to the Federal Trade Commission, approximately $16 billion was lost to fraud in 2025, which is an increase of over $3.5 billion from the previous year—something we find unacceptable.
The DFI reported that the allegedly fraudulent education institute engaged in marketing campaigns on platforms like Facebook, Instagram, and LinkedIn, promoting free investment training alongside an AI system that purportedly provided “trading signals” to effectively navigate the cryptocurrency market.
These groups are said to have issued training sessions and trading signals to investors via chat groups on WhatsApp and Telegram.
According to DFI, interested individuals were then invited to perform test trades using virtual currencies on specific trading platforms linked to the foundation’s website and app. These platforms, allegedly established in Washington to appear more credible, showcased false returns to encourage further investment from individuals.
The agency also pointed out that the foundations and platforms involved enlisted unregistered third parties to help investors convert their funds into virtual currencies and deposit them on trading platforms.
Moreover, DFI claims that these platforms defrauded investors through advance payment scams, which required undisclosed fees before any withdrawals could take place. “Desperate investors often paid upfront fees, yet not a single person managed to recover their funds,” DFI asserted.
In the legal action, DFI intends to compel the defendants to stop violating securities laws, impose fines totaling $1 million, and cover costs associated with the investigation.
