Washington DFI Alleges $9.9M Crypto Fraud via Fake Education Foundations and Trading Platforms
Summary
The Washington State Department of Financial Institutions filed a Statement of Charges (S-24-3882-25-SC01) against Zenith Asset Tech Foundation and related investment education foundations for multiple violations of the Securities Act between 2024 and 2025. The enforcement action alleges that scammers operated fake cryptocurrency investment schemes through fake education foundations, fake securities token offerings, fake AI-generated trading signals, and fake trading platforms, defrauding at least 38 investors out of nearly $9.9 million, including approximately $49,000 from three Washington residents. DFI's Statement of Charges announces intent to order the respondents to cease and desist, pay fines totaling $1 million, and pay investigation costs.
“DFI alleges that scammers defrauded investors through elaborate cryptocurrency scams that utilized fake education foundations, fake securities token offerings, fake AI generated investment trading signals, and fake trading platforms.”
Firms offering or promoting cryptocurrency investment products, particularly those using social media marketing and AI-generated trading signals, should treat this enforcement as a signal of heightened state-level scrutiny on unregistered securities offerings in the digital asset space. The $1 million fine ceiling and explicit identification of advance fee withdrawal scams provide specific compliance benchmarks for fraud prevention programs.
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What changed
Washington DFI's Division of Consumer Services filed a Statement of Charges against Zenith Asset Tech Foundation and associated investment education foundations and trading platforms (collectively the "Respondents") for violations of the Securities Act. The alleged scheme operated through multiple layers: fake education foundations advertising free investment training and AI-powered trade signals on Facebook, Instagram, and LinkedIn; fake trading platforms incorporated in Washington to appear legitimate; and advance fee scams requiring undisclosed fees before withdrawal. The proposed order seeks cease and desist, $1 million in fines, and investigation costs.
Financial advisers and investment professionals should note this as a signal of intensified state-level scrutiny on cryptocurrency investment schemes, particularly those involving social media marketing, AI-generated trading signals, and unregistered token offerings. Firms offering or promoting cryptocurrency-related investment products should review their marketing materials, verify registration status, and ensure compliance with state securities laws. The use of advance fee structures for withdrawal is explicitly identified as a red flag in this enforcement action.
Penalties
Fines totaling $1 million plus costs related to the investigation, as stated in the Statement of Charges
Archived snapshot
Apr 24, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Washington State DFI Alleges Fake Investment Education Foundations and Trading Platforms Defrauded Investors Out of Nearly $9.9 Million in Cryptocurrency Scams
FOR IMMEDIATE RELEASE FROM
THE WASHINGTON DEPARTMENT OF FINANCIAL INSTITUTIONS
Contact
Lyn Peters, Director of Communications
PH (360) 902-8731 or Media Query Form
April 22, 2026 OLYMPIA – The Washington State Department of Financial Institutions (DFI) filed a Statement of Charges against investment education foundations, including Zenith Asset Tech Foundation, for multiple violations of the Securities Act between 2024 and 2025 and participation in alleged cryptocurrency scams.
DFI alleges that scammers defrauded investors through elaborate cryptocurrency scams that utilized fake education foundations, fake securities token offerings, fake AI generated investment trading signals, and fake trading platforms. At least 38 investors lost nearly $9.9 million in these scams, including three Washington residents who invested approximately $49,000.
“It’s more important than ever for regulatory agencies like DFI to take enforcement action like this in an effort to protect people from losing their life savings,” DFI Director Charlie Clark said. “Federal Trade Commission data shows Americans reported losing nearly $16 billion to fraud in 2025 — an increase of more than $3.5 billion over the previous year. That’s unconscionable to us.”
The alleged fraudulent investment education institutions (“Foundation Respondents”) advertised on social media, including Facebook, Instagram, and LinkedIn, claiming to provide free investment training and touting AI systems that could provide investors with “trade signals” that effectively timed the cryptocurrency investment markets. The Foundation Respondents distributed training lectures and trade signals to investors in chat groups on WhatsApp and Telegram.
The Foundation Respondents then invited interested investors to place test trades in cryptocurrency on designated trading platforms accessible from both websites and apps (“Platform Respondents”). The Platform Respondents were incorporated in Washington to make them appear more legitimate, and prompted investors to invest their personal funds by showing fake profits.
The Foundation and Platform Respondents also designated unregistered third parties to assist investors with converting investment funds into cryptocurrencies and depositing them into investor accounts at the trading platforms.
The Platform Respondents further defrauded investors through advance fee scams, requesting various previously-undisclosed fees before investors could withdraw any funds. In desperation, many investors paid the advance fees, but none received any of their investment funds back.
The Statement of Charges announces DFI’s intent to order the Respondents to cease and desist from violations of the Securities Act, to pay fines totaling $1 million, and to pay costs related to the investigation.
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