Thousands may have lost to the crypto trading app

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Thousands of people are believed to have lost their savings after investing in a cryptocurrency trading app called iEarn Bot.

Experts who have investigated the company say it could be one of the biggest crypto scandals to date.

Cryptocurrency trading has become popular, with people often promising big rewards over short periods of time.

But law enforcement is warning of a growing number of scams and recommending investors to conduct “due diligence.”

“The money just disappeared”

Roxana, not her real name, is from Romania. She says she lost hundreds of dollars investing in iEarn Bot. She asked not to reveal her identity, fearing it could damage her professional reputation.

Clients who bought the bots – like Roxana – were told their investment would be handled by the company’s artificial intelligence program, guaranteeing high returns.

“I invested in a bot for a month,” Roxana tells the BBC. “You could see how many dollars the app was bringing in on the app: there were graphs showing how the investment was progressing.

“It looked pretty professional until they announced a maintenance at some point.” At this point, withdrawals from the app have been frozen for some time.

“Some people started saying, ‘I can’t retire … what happens,'” explains Roxana. “I requested the withdrawal and the money just disappeared. The portfolio went to zero – but I never got any money credited to my wallet.”

In Romania, dozens of high-profile figures, including government officials and academics, were persuaded to invest through the app because it was sponsored by Gabriel Garais, a top IT expert in the country.

Mr Garais says he too was tricked into investing his own savings in the app and lost his money.

But Roxana insists she would never have considered investing without Garais’ sponsorship.

“We had the knowledge it could be a scam,” she says, “but the fact that there was a respected teacher between us and the company meant we didn’t check too much — we didn’t doubt too much .”

What happened in Romania is not an isolated case. It is also not unique to Romania.

When Silvia Tabusca, a Romanian organized crime expert from the European Center for Legal Education and Research, started looking into iEarn Bot, she discovered that many people in other countries had also lost their money on the program.

What surprised her the most was the extent of the operation.

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Organized crime expert Silvia Tabusca was surprised by the scale of the operation

“From what we’ve seen, the number of investors is pretty high,” she says. “In Indonesia, for example [iEarn Bot] claim they have 800,000 customers.”

“Initially, the app worked very well,” says Ms. Tabusca.

“When they have enough investors and enough money invested in a certain country, they no longer allow that country to pull out – and they open up other countries.”

iEarn Bot presents itself as a US-based company with excellent credentials, but when the BBC checked some information on their website, some red flags were raised.

The man the site credits as the company’s founder told us he had never heard of them. He said he had lodged a complaint with the police.

The Massachusetts Institute of Technology is all named as a “strategic partner” of iEarn Bot, along with companies like Huawei and Qualcomm, but they too said they were not aware of or working with the company.

The company does not provide any contact details on the website. When the BBC checked their Facebook page history, we learned that the account was promoting weight loss products until the end of 2021. It is administered from Vietnam and Cambodia.

iEarn Bot places great emphasis on getting investors to attract more people to the app.

“The way people work at this company is more like a Ponzi scheme than an actual business,” says Ms. Tabusca.

The BBC has also seen chat conversations where people claiming to be from iEarn Bot’s customer service told investors that they had to pay a 30% fee to withdraw their funds.

“Some people really wanted their money back, so they paid the fee – but they still couldn’t withdraw,” says Ms Tabusca.

The BBC has repeatedly contacted the iEarn Bot for comment, but so far has not responded.

recruitment events

In some countries, such as Nigeria and Colombia, local executives have been pushed by iEarn Bot mentors — with whom they only ever communicated via Telegram — to organize recruitment events.

Andres from Colombia said he was actively recruiting people to join the app. He still believes the company is legit.

“They had their registration in the US, which showed they were legitimate,” he says. “And they paid.”

In his country, payments were stopped in December. People have been told that the company is converting investments in USDT — an established cryptocurrency — into a new coin called iBot that has the same value.

Investors have been asked to wait until March for the official launch of the new coin. But people are still waiting to access their money.

“[People] took out loans to invest. They used money from other sources, a lot of people were affected,” says Andres. “When local leaders didn’t have answers, people started getting angry.”

With the help of an analyst, the BBC managed to identify a major cryptocurrency wallet that received payments from around 13,000 potential victims, with a profit of almost $1.3 million (£1 million) in less than a year.

But we could not understand where and to whom the money went.

This is a common problem for investigators.

“One of the challenges is identifying and attributing who the illegal actor is, where the value is going, and then being able to initiate investigative steps and law enforcement actions,” said John Wyman, head of the FBI’s new Virtual Assets Unit.

Investigations in this type of scheme, he says, are rapidly becoming global.

Such investigations require international cooperation and may take longer, but he insists those responsible eventually be brought to justice.

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Mr Wyman says educating people about investment risks is key to stopping scammers

The FBI created the Virtual Assets Unit last year to respond to the growing number of virtual currency crimes.

It invites people who have been victims of fraud to file a complaint on the FBI’s dedicated page.

But law enforcement officials claim the best way to fight scammers remains prevention.

“Knowing – and doing some due diligence before investing – is key,” says Mr. Wyman.

“Like anything else, if it sounds too good to be true, it often is.”

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