Washington financial watchdog warns of scam involving fake crypto ‘professors’

A new scam targeting cryptocurrency investors has emerged, with malicious actors posing as business “professors.”

The Washington State Department of Financial Institutions (DFI) warned that the scheme offered a lucrative investment opportunity, starting with ads running on social media platforms such as Facebook.

When users click on the link in the ad, they are directed to a “Letter from Professor” or “Letter from Dean” on a website designed by scammers. The scammers then claim to be affiliated with an “Academy,” “Business School,” or “Wealth Institute” to prove their credibility.

Those interested are invited to join a WhatsApp or Telegram group run by people with titles such as professor, consultant or assistant. The groups also include other members posing as investors, and the DFI says they could be bots or part of the scheme.

In these groups, users are offered daily trading signals and investment tips, and it is claimed that these will provide great returns.

Victims are directed to a website that facilitates cryptocurrency trading and are encouraged to invest using information provided by the group.

The real scam occurs when scammers offer large loans or lines of credit to their victims in order to meet the capital requirements to participate in some of their offers.

These fake loans are processed informally on messaging platforms. Investors are often asked to provide financial information, such as credit scores, and sign fake loan documents to make the process appear legitimate.

If a victim is not interested in the loan offer, the “helpers” borrow cryptocurrency funds on their behalf and deposit the funds into the victim’s trading account. A screenshot is provided as proof of the transaction.

However, DFI found that these transactions were fraudulent due to the lack of record on blockchain scanners.

Victims are told they can repay the loan using profits made on the platform. However, when they try to do so, their accounts are frozen and they are asked to repay the loan out of their own pocket.

Scammers also threaten victims with legal action if they refuse to pay back.

“DFI has not yet received any reports of an investor being able to repay the loan and withdraw their money,” the announcement said.

DFI also reported a scam using the same tactics, where a victim was duped out of $300,000. The complaint concerned “Excellence and Innovation Fortune Business School,” which claimed to be a financial institution but was instead a front for the ICHCOIN cryptocurrency scam.

These types of scams, where malicious people present themselves as professionals, have become quite common in the cryptocurrency industry.

Regulators in the United Kingdom recently warned the public about an email scheme involving scammers posing as lawyers, who demanded cryptocurrency payments from victims while claiming to have videos that could damage their reputation.