Scammers targeting the crypto sector are getting more creative as adoption continues to grow. US regulators have issued a warning against an emerging category of crypto fraud targeting crypto investors, where scammers pose as professors or academics. Social networking platforms such as Facebook, WhatsApp and Telegram are being exploited by cybercriminals to find and communicate with potential victims, with the aim of draining their crypto holdings through elaborate schemes.
The Washington State Department of Financial Institutions (DFI) Securities Division has seen an increase in complaints, suggesting a new type of scam. According to the DFI, scammers claiming to be professors or deans at business schools or wealth management institutes have been contacting people offering courses related to the crypto sector.
“The alleged fraud usually starts with an investor being placed in a WhatsApp or Telegram group. The ‘Professor’ and founder of the company offers investment courses, such as ‘daily trading signals’, which result in outsized returns,” the DFI said explains.
Some scammers give their victims a few crypto tokens to test whether they can “deposit” them on the platforms these malicious actors promote to them, promising high returns. Some offer informal credit and lending facilities via messaging apps to “help” victims invest in projected high-end crypto initial coin offerings, NFTs or altcoins.
According to the DFI, in several cases, scammers have their group members pose as other “real investors” in WhatsApp and Telegram groups, which are then used to communicate with their victims.
“When the investor tries to repay his loan, the company informs him that his account will remain frozen until he can repay the loan using external funds. When he cannot do so, investors have received threatening messages,” the DFI added.
It is still unclear how many victims have been affected by this scam. The DFI has also not disclosed how many complaints it has received about this issue in recent months.
Meanwhile, scammers are becoming increasingly sophisticated in targeting their crypto victims. Many are designing legitimate-looking mobile apps and websites to convince unsuspecting victims to join their schemes.
“These companies may post various regulatory or government agency documents on their website to appear legitimate. When investors go to report the allegedly fraudulent companies and platforms, the company may announce that they are going through a ‘merger’ without providing any additional details,” the regulator said, asking investors to verify the legitimacy of any crypto-related website or app they plan to do business with.
In June, the US Federal Trade Commission (FTC) warned the crypto world about a rise in romance scams, where scammers lured people into investing in dodgy crypto tokens while pretending to be looking for a romantic relationship.
