A new scam is targeting cryptocurrency investors, with the bad actors masquerading as business “professors.”

According to a warning issued by the Washington State Department of Financial Institutions (DFI), the scheme starts with advertisements on social media platforms like Facebook, offering a lucrative investment opportunity.

When users click the link in the ad, they are redirected to a “Letter from the Professor” or “Letter from the Dean” on a website designed by scammers. To establish credibility, the scammers then claim to be associated with an “Academy,” “Business School,” or “Wealth Institute.”

Those interested are invited to a WhatsApp or Telegram group managed by individuals with titles such as professor, advisor, or assistant. The groups also include other members posing as investors, which the DFI says may be bots or part of the scheme.

In these groups, users are then offered daily trading signals and investment tips, claiming that these will result in huge returns.

The victims are introduced to a website that facilitates cryptocurrency trading and are encouraged to make investments using the information provided by the group.

The real scam plays out when the scammers offer the victims high-dollar loans or lines of credit to meet the capital requirements to participate in some of their offerings.

These bogus loans are processed informally on the messaging platforms. To make the process seem legitimate, investors are often asked to provide financial information, such as credit scores, and to sign fake loan documents.

If a victim isn’t interested in the loan offer, the “assistants” borrow cryptocurrency funds on their behalf and deposit the funds into the victim’s trading account. A screenshot is provided as proof of the transaction.

However, the DFI found these transactions to be fake as they have no record on blockchain explorers.

Victims are told they can repay the loan using profits made on the platform. However, when trying to do so, the victim’s accounts are frozen, and they are asked to repay the loan from their own pockets.

Scammers also threaten victims with legal action if they deny repayment.

“DFI has yet to receive a report where an investor was able to withdraw their funds by paying the loan back,” the announcement said.

The DFI also reported a scam using the same tactics, where a victim was duped of $300,000. The complaint was about the “Excellence and Innovation Fortune Business School,” which claimed to be a financial institution but was instead a front for the ICHCOIN cryptocurrency scam.

These sorts of scams, in which the bad actors disguise themselves as professionals, have become quite prevalent in the cryptocurrency space.

Regulators in the United Kingdom recently warned the public about an email scheme with scammers posing as lawyers. These fake advocates demanded cryptocurrency payments from victims by alleging that they owned videos that could harm their reputation.