Thousands of people have reportedly lost their savings after investing in a cryptocurrency trading app called iEarn Bot, the BBC reports. According to the cited source, experts who have investigated the company say it could be one of the biggest crypto scandals ever.
Thousands of people have been scammed by a crypto app, Photo: Shutterstock
Cryptocurrency trading has become popular, with people often being duped with large rewards for short periods. But law enforcement agencies warn of a growing number of scams in the crypto market and advise investors to conduct due diligence.
The money just disappeared
Among those who were put in such a situation is Roxana, a woman from Romania. She says she lost hundreds of euros when she invested in iEarn Bot. She asked that her identity not be revealed because she fears that her professional reputation could be affected, so Roxana is not the woman’s real name.
Customers buying crypto – like Roxana – were told their investment would be managed by the company’s artificial intelligence program, guaranteeing high returns.
„I invested in a bot for a month“, says Roxana for the BBC. “You could see in the app how many dollars the app was making: there were graphs showing how the investment was progressing. It seemed pretty professional until at one point they announced maintenance. At that time, withdrawals from the app were frozen for some time. Some people started saying “I can’t withdraw… what’s going on“, explains Roxana. ,,I made the withdrawal request and the money just disappeared. The wallet became zero – but I was never credited to the wallet with any money“.
In Romania, dozens of high-profile figures, including government officials and academics, were convinced to invest through the app, as it was sponsored by Gabriel Garais, a top IT expert in the country.
Mr Garais says he too was duped into investing his own savings in the app and lost his money. But Roxana insists, if it weren’t for Garais’ recommendation, she would never have thought of investing.
„We had the knowledge to think it might be a scam,” she says“but the fact that between us and the company was a renowned teacher meant that we didn’t check too much – we didn’t doubt too much.”
According to the BBC, what happened in Romania is not an isolated incident. Nor is it unique in Romania. Thus, when Silvia Tabusca, a Romanian organized crime expert at the European Center for Legal Education and Research, began researching iEarn Bot, she discovered that many people in other countries had lost money through the scheme.
What surprised her the most was the scale of the operation.
„From what I have seen, the number of investors is quite high,” she says. “In Indonesia, for example, they (iEarn Bot) claim they had 800,000 customers.” “In the beginning, the app works very well“, says Mrs. Tabusca. “When they have enough investors and enough money invested in a certain country, they don’t allow that country to withdraw – and they open up other countries”.
iEarn Bot presents itself as a US company with excellent credentials, but when the BBC checked some information on its website, it raised red flags. The man whom the site names as the founder of the company said that he had never heard of the company and that he had already filed a complaint with the police.
The Massachusetts Institute of Technology, along with companies like Huawei and Qualcomm, are all named “strategic partners” of iEarn Bot, but they also said that they have no knowledge of the company and do not work with it.
On the website, the company does not provide any contact information. When the BBC checked the history of his Facebook page, it found that until the end of 2021, the account was advertising weight loss products and was being operated from Vietnam and Cambodia.
iEarn Bot puts a lot of emphasis on pushing investors to recruit more people to join the app.
„The way people in this company work is more like a Ponzi scheme than a real business“, says Mrs. Tabusca.
The BBC also saw chat conversations where people, claiming to be from iEarn Bot customer service, told investors that in order to withdraw their money they had to pay a 30% fee .
„Some people were desperate enough to get their money back, so they paid the fee – but still couldn’t withdraw“, says Mrs. Tabusca. The BBC has repeatedly approached iEarn Bot for comment, but has so far not responded.
Recruitment events
In some countries, such as Nigeria and Colombia, local leaders were pushed by iEarn Bot mentors – with whom they communicated only on Telegram – to organize recruitment events.
Andres, from Colombia, said he was actively recruiting people to join the app. According to him, the company is legitimate. “They had the US registration that showed they were legit“, he says. – And they were paying.
In his country, withdrawals were halted in December. People were told that the firm was converting the investment in USDT – a well-established cryptocurrency – into a new coin called iBot, which had the same value.
Investors were asked to be patient until March, when the new coin was expected to be officially launched. But people are still waiting to access their money.
,,People took loans to invest. They used money from other sources, many people were affected” says Andres. “Because the local leaders had no answers, people started to get angry.”
With the help of an analyst, the BBC was able to identify a major crypto wallet that received payments from around 13,000 potential victims, for a profit of almost $1.3m (£1m) in less than a year . But it could not be found where and to whom the money went.
For investigators, this is a common problem.
„One of the challenges is to identify the illicit actor, where the value is going, and then be able to take investigative and enforcement action,” says John Wyman, head of the FBI’s new Virtual Asset Unit.
Investigations into this type of scheme, he says, are quickly reaching the global level.
Such investigations require international cooperation and may take longer, but he insists those responsible will eventually be brought to justice.
The FBI established the Virtual Asset Unit last year to respond to the growing number of crimes involving virtual currencies.
It invites people who have been victims of scams to file a complaint on the FBI’s dedicated page. But law enforcement agencies say the best way to fight scammers remains prevention. “Knowing – and doing your due diligence before investing – is key,” says Mr. Wyman.
