Washington’s financial regulator has warned the public about a new crypto scam involving fraudsters posing as business “professors” to deceive victims into depositing their money into a crypto scheme under threat of “legal action.”
According to a July 16 statement by the Washington State Department of Financial Institutions (DFI), these “self-proclaimed professors” claim to be part of an “Academy,” “Business
Inside the Crypto Scam: Deceptive ‘Professors’ and False Promises
The fake academy offers high-dollar loans or lines of credit to investors to meet capital requirements for a supposedly exclusive new offering.
Investors are required to provide personal information such as credit scores or licenses and sign loan documents, creating an appearance of legitimacy.
Sometimes, even if the victim declines, an assistant of the professor will borrow funds, typically in cryptocurrency, on behalf of the investor and deposit them into their account. They may provide a screenshot to simulate a transaction, but blockchain explorer sites reveal no actual transaction took place, according to the DFI.
Initially, investors are assured they can repay the loan with their earnings. However, the company freezes their accounts and starts issuing legal threats if they fail to repay the loan independently, according to the DFI.
“When unable to comply, investors face intimidating messages and collection notices threatening legal action,” the DFI stated. They have not received reports of investors successfully withdrawing funds after repaying the loan.
DFI received complaints about “Excellence and Innovation Fortune Business School,” which purported to be a financial and investment-focused institution. However, it misled victims into the ICHCOIN cryptocurrency scam.
The scammers initially sent 500 Tether (USDT) to the victim to “test” the platform, but later convinced them to invest $300,000 of their own money into the scheme.
“Supposedly, the investor received a 450,000 USDT deposit into their ICHCOIN account. However, a blockchain review showed no record of this transaction,” noted DFI.
The scam was conducted via WhatsApp, where investors were asked to provide personal information to sign a loan document.
“DFI advises consumers to exercise utmost caution when approached with investment or financial service solicitations.”
