On 16 July 2024, the Washington State Department of Financial Institutions (DFI) issued an urgent warning about a new crypto scam that is reaping victims across the country. The scam is being carried out by individuals posing as ‘professors’ at fictitious academic institutions, promising lucrative loans and investments. This detailed article explores how the scam works, who the victims are and how to protect yourself.

How the scam starts

The scam often starts with a Facebook ad that catches the attention of victims. By clicking on the link, interested parties are redirected to a website where they find a ‘Letter from the Professor’ or a ‘Letter from the Dean’. These alleged academics claim to belong to prestigious institutions such as ‘Academy’, ‘Business School’ or ‘Wealth Institute’. They promise investment courses with exorbitant rates of return, but everything is a sham.

Engagement via WhatsApp and Telegram

After clicking on the link, victims are added to groups on WhatsApp or Telegram, with generic names such as ‘daily trading signals’. Here, the fake professors continue to promise high returns on investments and offer high-value loans or lines of credit to help investors meet the capital requirements for new exclusive offers.

The fraud trial

1. Fictitious Loan Offer. Investors receive an offer of a loan or line of credit, which is often very tempting. They are asked for personal details such as credit score or driver’s licence, and are asked to sign a loan document.
2. Fake Deposits. Even if the victim refuses the offer, the fictitious professor’s assistant could still ‘borrow’ the cryptocurrency funds on behalf of the investor and deposit them into their account, accompanying everything with fake screens.
3. Threats of Legal Action. When investors try to withdraw funds, their accounts are frozen and they start receiving threats of legal action if they do not repay the loan with their own money.

An Exemplary Case: ICHCOIN

In a similar case, theExcellence and Innovation Fortune Business School scammed victims with the cryptocurrency ICHCOIN. Investors received 500 Tetters (USDT) as proof to test the platform. Convinced of the authenticity, one of them invested $300,000. However, a check on the blockchain revealed that there was no trace of the USDT 450,000 transaction they should have received.

Tips for protection

1. Verify Authenticity. Before responding to any investment offer, verify the authenticity of the institution or professional.
2. Do not share personal information. Never provide personal or financial information without thorough verification.
3. Check Transactions. Use blockchain exploration sites to verify the legitimacy of transactions.