Michaela
The North Dakota Securities Department has issued a warning about a new crypto scam in which fraudulent “investment education foundations” lure investors with promises of stock and cryptocurrency education, offering so-called βrisk-freeβ trials and loans.
In a statement released by the North Dakota Securities Department, Commissioner Tim Karsky warned that the primary objective of the fraudsters is to convince investors to deΡosit their own funds into the platform. Additionally, they encourage victims to take out fraudulent loans while collecting excessive commissions.
“The rise of fake ‘investment education foundations’ is a concerning trend that preys on investors’ desire to reduce the risk of investing in cryptocurrency,” Commissioner Karsky said. “These scams often promise guaranteed returns and sophisticated advice, but they are designed to deceive. Itβs crucial for investors to remain vigilant and skeptical of unsolicited offers before handing over their money,β he added.
The department detailΠ΅d how the crypto scam often starts with social media advertisements. These ads direct potential victims to WhatsApp groups controlled by an imposter founder and automated bots. The so-called founder conducts investment lessons before stΠ΅ering participants toward a deceptive cryptocurrency exchange.
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Investors are then enticed to test a proprietary AI bot with βfreeβ tokens that appear to generate profits. This ultimately convinces them to invest real money. Those without sufficient funds arΠ΅ directed to fraudulent loan providers on Telegram who deposit funds directly onto the platform.
However, investors soon find that they cannot withdraw their supposed earnings until they repay fabricated loans or commissions. Their accounts are frozen under false regulatory claims. Eventually, the operation is shut down, only to resurface under a different name.
Social Media Crypto Scam Tactics
To create a false sense of legitimacy, the fraudsters use authentic government and professional documents, including registrations with the U.S. Department of the Treasury and the Securities and Exchange Commission (SEC). They also enhance their deception by publishing articles that make their platform appear credible and utilizing older website domains to give the illusion of an established presence.
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Investors should be wΠ°ry of unexpected investment offers, particularly those received via social mediΠ°, email, or phone calls, the North Dakota Securities Department warned.
Karsky cautioned against assuming an education foundation is legitimate simply because it appears on social media. He encouraged investors to verify the registration status of both the foundation and any associated crypto exchange by contacting the North Dakota Securities Department.
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MICHAELA
Michaela is a news writer focused on cryptocurrency and blockchain topics. She prioritizes rigorous research and accuracy to uncover interesting angles and ensure engaging reporting. A lifelong book lover, she applies her passion for reading to deeply explore the constantly evolving crypto world.
