The Washington State Department of Financial Institutions (DFI) has issued a warning about a burgeoning crypto scam involving individuals posing as business professors. These fraudsters entice victims into risky cryptocurrency investments by promising extraordinarily high returns, often coercing them into taking action through the threat of legal repercussions.
Modus Operandi of the Scammers
The scam typically begins with victims encountering advertisements on social media platforms like Facebook. These ads lead them to a website where they are greeted by a “Letter from the Professor” or “Letter from the Dean,” purporting to represent prestigious-sounding institutions such as an “Academy,” “Business School,” or “Wealth Institute.”
Once interest is piqued, victims are added to messaging groups on WhatsApp or Telegram with names like “daily trading signals.” Here, the self-proclaimed professors promise lucrative investment returns, drawing victims deeper into the scam.
How the Scam Unfolds
- Offering High-Dollar Loans or Credit Lines: Victims are offered substantial loans or credit facilities to meet the capital requirements for supposedly exclusive investment opportunities.
- Request for Personal Information: Victims are asked to provide sensitive personal information, including their credit score or driver’s license, and to sign official-looking loan documents to make the transactions appear legitimate.
- Fictitious Fund Transfers: In instances where victims decline the offers, an ‘assistant’ allegedly borrows funds on their behalf, depositing them into the victims’ accounts with fabricated evidence like falsified screenshots. However, blockchain explorers reveal that no such transactions occur.
- Threats and Freezing of Accounts: Initially, victims are told they can repay the loans with profits from their investments. Nevertheless, the scam culminates with the company freezing their accounts and threatening legal action, forcing victims to repay the nonexistent loans with their own money.
In a related scam, victims were drawn into a scheme by the so-called “Excellence and Innovation Fortune Business School,” which was merely a front for the ICHCOIN cryptocurrency scam. Victims were first sent a small amount of Tether (USDT) to test the platform and were later deceived into investing substantial sums, which purportedly resulted in large deposits that never actually materialized on the blockchain.
Legal and Financial Ramifications
The DFI has not yet recorded a successful case where a victim was able to retrieve their funds by repaying these fraudulent loans. This has led to an increasing number of complaints and legal threats being issued against the victims, further complicating their financial and emotional distress.
Given the sophistication and apparent legitimacy of these scams, the DFI strongly advises consumers to exercise extreme caution before engaging with any solicitation offering investment or financial services, especially those requiring upfront payments or personal information.
| Feature | Description |
|---|---|
| Scam Entities | Fictitious Academies and Business Schools |
| Initial Contact | Social media ads leading to official-looking documents |
| Communication Channels | WhatsApp and Telegram groups |
| Fraudulent Tactics | Offers of loans for crypto investments, threats of legal action |
| Consumer Advice | Exercise caution, verify credentials, avoid upfront payments |
This emerging scam underscores the persistent risks within the crypto investment landscape, where the allure of high returns often blinds individuals to the dangers of sophisticated fraud schemes. The DFI’s alert serves as a crucial reminder for potential investors to verify the legitimacy of any investment opportunity and to be wary of any scenario that involves unsolicited offers, especially those demanding sensitive personal information or financial commitments.
