North Dakota Warns of Emerging Crypto Scam Targeting Investors

According to ShibDaily, the North Dakota Securities Department has issued a warning regarding a new cryptocurrency scam involving fraudulent 'investment education foundations.' These entities entice investors with promises of stock and cryptocurrency education, offering so-called 'risk-free' trials and loans. Commissioner Tim Karsky of the North Dakota Securities Department highlighted that the primary aim of these fraudsters is to persuade investors to deposit their own funds into the platform. Additionally, they encourage victims to take out fraudulent loans while collecting excessive commissions. Commissioner Karsky expressed concern over the rise of fake 'investment education foundations,' which exploit investors' desire to minimize the risks associated with cryptocurrency investments. He noted that these scams often promise guaranteed returns and sophisticated advice but are ultimately designed to deceive. Karsky emphasized the importance of investors remaining vigilant and skeptical of unsolicited offers before committing their money. The department explained that the scam typically begins with social media advertisements, which direct potential victims to WhatsApp groups managed by an imposter founder and automated bots. The supposed founder conducts investment lessons before guiding participants toward a deceptive cryptocurrency exchange. Investors are then enticed to test a proprietary AI bot with 'free' tokens that appear to generate profits, ultimately convincing them to invest real money. Those lacking sufficient funds are directed to fraudulent loan providers on Telegram, who deposit funds directly onto the platform. However, investors soon discover that they cannot withdraw their supposed earnings until they repay fabricated loans or commissions, with their accounts frozen under false regulatory claims. The operation eventually shuts down, only to reemerge under a different name. 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 further 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. The North Dakota Securities Department advised investors to be cautious of unexpected investment offers, particularly those received via social media, email, or phone calls. Karsky urged investors not to assume an education foundation is legitimate simply because it appears on social media. He recommended verifying the registration status of both the foundation and any associated crypto exchange by contacting the North Dakota Securities Department.