The FBI is sounding the alarm on a cryptocurrency scam that’s cost some Americans their entire life savings.

According to an abc13 report, the bureau alleges that ICHCoin, which lured victims under the pretense of offering a crash course on cryptocurrency investing, is an elaborate scam that has siphoned millions of dollars from individuals across the United States.

FBI Houston’s assistant special agent in charge Amanda Culver told the media outlet that the perpetrators behind the scam have been duping people since December 2023 and have stolen roughly $30 million via the ICHCoin app. Some victims had allegedly lost their entire lifesaving.

Culver added that scammers can easily find victims as “people are very interested in investing in cryptocurrency,” emphasizing the importance of doing proper research before making any investments.

The FBI is currently investigating the scam and has urged victims to come forward with information regarding ICHOCoin or similar scams by filling out their online questionnaire.

How the ICHCoin scam works

According to Culver, the scam works in multiple stages. First, scammers approach victims on social media platforms like Facebook and Instagram. The icebreaker is an offer to educate the victim on cryptocurrency investing, promising to open doors to lucrative profits through crypto investments.

Once victims are convinced, they are redirected to messaging platforms like WhatsApp, where a fake professor or teacher contacts them to proceed with the scam. While Culver did not provide more details on how the scam plays out from here, the Washington State Department of Financial Institutions had flagged ICHCoin in one of its warnings in July. 

At the time, crypto.news reported that the victims were lured into the “Excellence and Innovation Fortune Business School,” which is a front for the ICHCoin scam and were added to groups controlled by these fake academics, which offered daily trading signals and investment tips for massive returns.

This is also where the victims are introduced to a fake crypto trading platform, in this case, the ICHCoin app, and urged to make investments. Culver added that the scammers often urge victims to lie to the banks when making transfers to these platforms. The app also shows false return on investment data, but when attempts are made to withdraw any profits, the accounts are frozen, or the scammers ghost the victim.

She also stressed the importance of recognizing red flags, particularly when receiving “unsolicited messages” promising high returns or offering “free money” to investors, emphasizing that these are clear warning signs.

FBI hunting crypto scammers

Over the past months, the FBI has increased its crackdown on cryptocurrency scams and ramped up investigations. The bureau issued warnings regarding crypto threats on multiple occasions in September alone. 

For instance, on Sept. 3, the FBI cautioned businesses dealing with crypto exchange-traded funds that the notorious North Korean hacking group Lazarus started using “complex and elaborate” tactics to infiltrate their systems. In a subsequent report, the bureau revealed that over $5.6 billion was lost in frauds and scams involving cryptocurrencies, with individuals over 60 as the most targeted demographic.

In early October, the federal agency also charged an individual with attempting to extort cryptocurrency assets.

The founder of a cryptocurrency trading platform has been accused of paying Los Angeles police officers to help him extort a victim for their digital assets.

A complaint filed by the Federal Bureau of Investigation accuses Adam Iza of bribing three Los Angeles Sheriff’s Department deputies to solicit police data and file dubious search warrants against a business associate, identified only as E.Z., in a bid to extort cryptocurrency.

Iza, who founded the crypto trading platform Zort Inc., allegedly paid the deputies up to $280,000 per month and used the information he acquired to threaten E.Z. after a failed kidnapping attempt in Riverside County in November 2021.

According to a Riverside County Sheriff’s Department report reviewed by the FBI, E.Z., who had known Iza for over two years, claimed that Iza arranged for two men, including a former sheriff’s deputy, to force him into an SUV at gunpoint. E.Z. managed to escape and contacted law enforcement. 

Iza, however, told police that he had feared for his own safety and had called the men as bodyguards.

The FBI report added that Iza hired a private investigator to track E.Z. and sent him images of sensitive law enforcement data, including a “GPS search warrant” for a phone number that belonged to the victim.

After the failed abduction, E.Z. claimed to have received messages from unknown numbers containing pictures of his personal details pulled from police databases. 

The messages also showed images of his family, heightening the intimidation efforts, according to the complaint. The harassment continued, and E.Z. claimed he was pressured by Iza to hand over a laptop that allegedly contained cryptocurrency.

Further, Iza has also been accused of extorting another victim by masquerading as an FBI officer and stealing a laptop containing crypto while holding the victim at gunpoint for the password.

Iza is also accused of evading taxes by hiding millions of dollars in income, some of which came from cryptocurrency transactions. Between 2020 and 2022, Iza and his associates allegedly amassed more than $30 million, funneled the money through shell companies, and used the funds to purchase luxury items such as cars and to cover the rent for a mansion in Bel Air.

Prosecutors have charged Iza with conspiracy against rights and tax evasion. He is scheduled to appear in court on Oct. 8.

Crypto demand fueling crime spree

Sadly, cases like this aren’t rare in the crypto world, with the sector seeing its share of extortion and kidnappings. As the value of cryptocurrencies like Bitcoin continues to rise, they’ve become prime targets for criminals.

As previously reported by crypto.news, in August, the Malaysian police were looking for four kidnappers who demanded and received a $1.2 million crypto ransom from the relatives of a victim.

In a separate case, authorities in Hong Kong arrested two Kidnappers who demanded $66,000 USDT in ransom payment.

Last year, a cryptocurrency portfolio manager for a Dubai-based company was abducted in Spain, and the culprits demanded 1 million euros as ransom in cash and cryptocurrencies.

Meanwhile, in July, a foreigner in the Solomianskyi district in Kyiv, Ukraine, was robbed and murdered for 3 Bitcoin.

Crypto-related scams and fraud surged last year, with losses skyrocketing 45% in 2023 compared to the previous year, according to a new FBI report.

As crypto gains popularity in the United States, it also brings a rise in crypto scams. According to an FBI report released Sept. 9, the total losses to these scams exceeded $5.6 billion in 2023.

In 2023, the FBI Internet Crime Complaint Center received more than 69,000 complaints from the public regarding financial fraud involving cryptocurrencies, like Bitcoin (BTC), Ethereum (ETH), or Tether (USDT).

Investment scams were the most costly, accounting for 71% of the total losses, or about $3.96 billion. Call center fraud and government impersonation scams followed, contributing to 10% of the losses.

The most vulnerable demographic appears to be individuals over 60, who reported the highest number of complaints. According to the FBI, their collective losses surpassed $1.6 billion.

Different types of crypto scams 

Scammers often establish trust through dating apps or social media before luring victims into fraudulent cryptocurrency investments. Some of the scams highlighted by the FBI include investment scams, lottery scams, romance scams, credit card fraud, extortion, and ransomware.

Some of these scams like romance scams, often dubbed as pig butchering scams, involve fraudsters befriending victims under the pretense of a potential love interest. 

Victims may be allowed to withdraw small sums to build credibility, but they eventually find themselves duped into larger losses. In some cases, fraudulent recovery services that promise to retrieve their stolen funds further exploit the victims.

The FBI urged the public to exercise extreme caution when approached with investment opportunities by individuals they have only met online, emphasizing that anyone can be a target.