Discover the latest crypto scam where fraudsters pose as business professors to trick victims into depositing funds. Learn how to protect yourself from these deceitful schemes.
Washington’s financial regulator has issued a warning about a new crypto scam that's tricking unsuspecting victims by posing as business “professors.” These scammers are using sophisticated methods to lure individuals into depositing their hard-earned money into fraudulent cryptocurrency schemes under the threat of legal action.
The Washington State Department of Financial Institutions (DFI) highlighted this emerging scam in a statement on July 16. According to the DFI, fraudsters are posing as part of an “Academy,” “Business School,” or “Wealth Institute.” They entice victims with promises of courses that supposedly yield "exorbitant rates of return."
How the Scam Unfolds
The scam typically begins with a Facebook ad. Interested individuals click the link and are directed to a company website featuring a “Letter from the Professor” or “Letter from the Dean.” This clever tactic is designed to establish credibility and trust.
Once on the website, victims are often added to a WhatsApp or Telegram chat group with a name like “daily trading signals.” Here, the self-proclaimed professors lure them with promises of lucrative returns on their investments. The fake academy then offers high-dollar loans or lines of credit to meet capital requirements for an exclusive new offering.
Making the Scam Appear Legitimate
To make the scam seem more legitimate, investors are asked to provide personal details such as their credit score or license and to sign a loan document. This process is meant to reassure the victim of the authenticity of the opportunity.
In some cases, even when the victim declines the offer, the professor's “assistant” will borrow the funds—often in cryptocurrency—on behalf of the investor and deposit them into their account. They will attach a screenshot to make it appear real, but blockchain explorer sites reveal that no transaction ever occurred.
The Trap Tightens
Initially, investors are told that the loan can be paid off with the profits they accrue. However, the reality is much different. The company freezes their accounts and starts threatening them with legal action if they don’t repay the loan out of their own pocket. Victims have received threatening messages and collection letters claiming legal action will be taken against them.
The DFI reported that they have not received any reports of investors successfully withdrawing their funds by paying back the loan. This highlights the severity and effectiveness of the scam.
A Similar Incident: Excellence and Innovation Fortune Business School
In a similar incident, the DFI received complaints about an entity named “Excellence and Innovation Fortune Business School.” This organization claimed to be a financial and investment-focused institution but instead lured victims into the ICHCOIN cryptocurrency scam.
In one case, scammers sent 500 Tether (USDT) for the victim to “test” the platform. The victim was eventually convinced to invest $300,000 out of their own pocket. The scammer promised a 450,000 USDT deposit into their ICHCOIN account, but a review of the blockchain showed no record of this transaction.
The Warning from Washington DFI
The Washington DFI urges consumers to exercise extreme caution before responding to any solicitation offering investment or financial services. They emphasize the importance of thoroughly researching any entity before providing personal information or financial details.
Protect Yourself from Crypto Scams
To safeguard yourself from these types of scams, consider the following tips:
Research Thoroughly: Verify the legitimacy of any investment opportunity and the individuals or institutions behind it. Check for reviews, complaints, and any regulatory warnings.
Be Skeptical of High Returns: If an offer sounds too good to be true, it probably is. High returns with little or no risk are a common red flag for scams.
Avoid Providing Personal Information: Be cautious about sharing personal details such as credit scores, licenses, or signing loan documents without verifying the legitimacy of the request.
Use Trusted Platforms: Conduct financial transactions and investments through well-known, reputable platforms and exchanges.
Report Suspicious Activity: If you encounter a suspicious investment opportunity, report it to your local financial regulator or law enforcement agency.
Crypto scams are becoming increasingly sophisticated, with fraudsters going to great lengths to appear legitimate. The recent warnings from the Washington DFI highlight the need for vigilance and due diligence in protecting your investments. By staying informed and cautious, you can avoid falling victim to these deceitful schemes.
Stay safe and always verify before you invest. For more updates on crypto safety and legitimate investment opportunities, follow OMGfin.
(BRAYDEN LINDREA, COINTELEGRAPH, 2024)