The Washington State Department of Financial Institutions (DFI) has issued a consumer alert regarding a surge in cryptocurrency scams on WhatsApp and Telegram involving self-proclaimed “professors.” These scams lure investors through social media ads and false educational institutions, promising high returns and offering dubious loans.
The Scams Unveiled
The DFI’s Securities Division has received multiple complaints about these fraudulent schemes. According to the alert issued on Tuesday, these scams typically involve companies posing as educational institutions, such as “Business Schools,” “Academies,” or “Wealth Institutes,” that claim to offer cryptocurrency investment education.
How the Scam Works:
- Initial Contact: Investors are drawn in by social media ads promoting these fake educational institutions.
- WhatsApp and Telegram Groups: Once investors show interest, they are added to WhatsApp or Telegram groups with names like “Wealth Club,” “Elite,” or “AI.”
- Role of Fake Professors: These groups are managed by supposed associates of the company who adopt titles such as professor, advisor, or assistant.
- Investment Courses and Signals: The fake professors offer courses and daily trading signals, promising high returns on investments.
- Test Investments: Investors are sometimes given small amounts of cryptocurrency to test the platform before making larger investments.
Dubious Loan Offers
In addition to promising high returns, these companies offer high-value loans or lines of credit to entice investors to join exclusive “VIP Clubs” or meet capital requirements for new offerings. These loans are often arranged informally through WhatsApp, with misleading account screenshots provided as proof.
Key Issues with Loans:
- Frozen Accounts: When investors try to repay these loans, they are told their accounts will remain frozen until external funds are provided.
- Threats and Legal Action: Investors receive threatening messages and claims of legal action if they fail to comply with the repayment demands.
The DFI urges investors to be cautious and conduct thorough research before engaging with any investment opportunity, especially those encountered through social media or messaging platforms. The use of high-pressure tactics and promises of guaranteed returns are red flags for potential scams.
