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 “risk-free” 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 deposit 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. It’s crucial for investors to remain vigilant and skeptical of unsolicited offers before handing over their money,” he added.
The department detailed 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 steering participants toward a deceptive cryptocurrency exchange.
Investors are then enticed to test a proprietary AI bot with “free” tokens that appear to generate profits. This ultimately convinces them to invest real money. Those without sufficient funds are 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.
Investors should be wary of unexpected investment offers, particularly those received via social media, 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.
Read More
- India Crypto Scam: Police Arrest Three in $2.4M Fraud, Mastermind Still at Large
- Baby Doge Owner Announces Jason Derulo Airdrop; ZachXBT Says ‘Scam’
- Scammers Pose as the Prince to Launch Fake Saudi Crypto Coin
Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
