Securities Department issues warning about investment scams

The North Dakota Securities Department has issued a cautionary alert to the public regarding a recent investment scam that involves counterfeit “investment education foundations.” These fraudulent schemes target unsuspecting investors by offering education on stocks and cryptocurrency, alongside enticing promises of “risk-free” trials and loans. Tim Karsky, the Commissioner of North Dakota Securities, explains that scammers aim to convince investors to invest their own capital into the platform while also encouraging them to take out fake loans, ultimately leading to exorbitant commissions.

These deceitful practices have seen a rise in popularity lately, taking advantage of investors seeking to minimize the risks associated with investing in cryptocurrency. Despite the promises of guaranteed returns and expert advice, these scams are carefully crafted to deceive individuals. Therefore, it is imperative for investors to exercise vigilance and skepticism when faced with unsolicited offers before parting with their hard-earned money.

Typically, the scam begins with targeted social media advertisements that direct individuals to WhatsApp groups managed by a fictitious founder and automated bots. The founder initially provides lessons on investing, gradually introducing a sham cryptocurrency exchange to prospective investors. Eager participants are then encouraged to test a unique AI bot using complimentary tokens that generate fabricated profits, enticing them to make real investments. In cases of insufficient funds, fake loan providers on platforms like Telegram step in, offering loans that are directly deposited onto the exchange. Investors find themselves unable to withdraw their profits until they repay these fraudulent loans or commissions, resulting in the freezing of their accounts due to fake regulatory reasons. Once the deception is unraveled, the scam is swiftly rebranded under new aliases to continue its illicit operations.

To lend an air of legitimacy to their endeavors, scammers incorporate genuine government and professional documents, such as registrations with entities like the U.S. Department of the Treasury and the U.S. Securities and Exchange Commission. They may also publish articles online to create an illusion of credibility and utilize outdated website domains to appear established.

The North Dakota Securities Department cautions investors to approach unsolicited investment opportunities with caution, particularly those that come through social media, emails, or phone calls. Karsky emphasizes the importance of verifying the credentials of any purported education foundation and cryptocurrency exchange by contacting the North Dakota Securities Department before engaging with them. By exercising due diligence and remaining vigilant, investors can protect themselves from falling prey to these fraudulent schemes and safeguard their financial well-being.