Emerging Scam Alert: Investment Education Foundations

Arkansas Securities Department Warns of Emerging Cryptocurrency Scams Involving Fake “Investment Education Foundations” and AI Bots

The Arkansas Securities Department (ASD) is warning the public about a new investment scam involving fake “investment education foundations” that lure investors with promises of education on stocks and cryptocurrency, “risk-free” trials, and loans. The main goal of the scammers is to persuade investors to invest their own money into the platform as well as take out fake loans, paying exorbitant commissions, according to ASD Staff.

The scam typically starts with social media ads leading to WhatsApp groups managed by a fake founder and bots. The founder provides investment lessons, eventually introducing a fraudulent cryptocurrency exchange. Investors are enticed to test a proprietary AI bot with “free” tokens, which generate fake profits, leading to real money investments. If funds are lacking, fake loan providers on Telegram offer loans deposited directly onto the exchange. Investors can’t withdraw profits until they repay these fake loans or commissions, with accounts frozen for fake regulatory reasons. The scam is eventually shut down and restarted under new names.

Scammers legitimize their operations using real government and professional documents, including registration with the U.S. Department of the Treasury and the SEC. They may also post articles online to appear legitimate and use old website domains to seem established.

How to Protect Yourself from Investment Fraud

The ASD urges investors to exercise caution before responding to unsolicited investment offers, especially those received though social media, emails, or phone calls.

ASD Staff urges investors to not assume an education foundation is trustworthy just because it is promoted on social media and asks that the public contact the Department to check if the education foundation and cryptocurrency exchange are registered.

If you suspect fraud or illegal activity, reach out to the ASD immediately at (800) 981-4429 or visit the agency website at securities.arkansas.gov. For additional information on this emerging scam, please view the full investment advisory at the following link: