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18/07/24
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Washington State DFI Reveals New Crypto Scam Approach
On July 16, the Securities Division of the Washington State Department of Financial Institutions (DFI) alerted consumers about a new crypto scam involving firms which claim to be an institution of higher education offering a curriculum mainly related to crypto investing.
According to the DFI, such firms sometimes have a website for the purported institution of higher education and another website for trading. The main page of the firm’s websites may include a “Letter from the Professor” or “Letter from the Dean”.
Bad actors using this approach usually introduce their victims to the investment opportunity via ads on social media like Facebook. They place them in WhatsApp or Telegram groups operated by purported associates of the firm with titles including professor, advisor, and assistant.
They provide their victims investment courses via such groups, including “daily trading signals” that bring massive rates of return. The role of the professors’ assistant is to communicate with the investors.
Some people pose as investors within the group, but they may be bots or involved in the scheme themselves, based on reports to the DFI. The scammers also have separate groups depending on how much an investor wants to invest. In some cases, some victims reportedly received a small amount of crypto for free to “test” the platform prior to investing their own funds.
They may provide high dollar loans or lines of credit to help investors meet the capital requirements for a new offering or to make more profit through more investments. Since the purported loans are in crypto, they lie about depositing it into the victim’s wallet, expecting repayment based on assurance that the profits made from the platform can be used for repayment.
The scammers ask investors to send wire transfers to pay for their investment instead of crypto, but the bank account name is not the firm’s name. Moreover, they have sophisticated-looking mobile apps with fraudulent claims and several red flags.
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