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 largest crypto scandals to date.
Trading in cryptocurrencies has become popular, with people often promised large rewards over short periods.
But law enforcement agencies warn of a growing number of scams and recommend investors conduct “due diligence”.
‘The money just disappeared’
Roxana, not her real name, is from Romania. She says she lost hundreds of euros when she invested in iEarn Bot. She asked not to have her identity revealed as she fears her professional reputation might be damaged.
Customers buying the bots – like Roxana – were told their investment would be handled by the company’s artificial intelligence programme, guaranteeing high returns.
“I invested in a bot for one month,” Roxana tells the BBC. “You could see in the app how many dollars the app was creating: there were graphics showing how the investment was progressing.
“It looked quite professional until, at some point, they announced maintenance.” At that point, for some time, withdrawals from the app were frozen.
“Some people started to say ‘I cannot withdraw… what is happening’,” explains Roxana. “I made the request to withdraw and the money just disappeared. The portfolio became zero – but I was never credited on my wallet with any money.”
In Romania, dozens of high-profile figures, including government officials and academics, were persuaded to invest via the app because it was sponsored by Gabriel Garais, a leading IT expert in the country.
Mr Garais says he too was fooled into investing his own savings in the app and lost his money.
But Roxana insists, had it not been for Garais’s sponsorship, she would have never considered investing.
“We had the knowledge to think this might be a scam,” she says, “but the fact that, in between us and the company there was a reputable teacher, meant that we didn’t check too much – we didn’t doubt too much.”
What happened in Romania is not an isolated incident. Nor is it unique to Romania.
When Silvia Tabusca, a Romanian organised crime expert from the European Center for Legal Education and Research, began looking into iEarn Bot, she discovered that many people in other countries had also lost their money in the scheme.
What surprised her most was the scale of the operation.
“From what we have seen, the number of investors is quite high,” she says. “In Indonesia, for example, they [iEarn Bot] claim they had 800,000 customers.”
“At first the app works very well,” says Ms Tabusca.
“When they have enough investors and enough money invested in a specific country, they don’t allow that country to withdraw any more – and they open other countries.”
iEarn Bot presents itself as a US-based company with excellent credentials, but when the BBC fact-checked some information on its website, it raised some red flags.
The man whom the site names as the company’s founder told us he had never heard of them. He said he has made a complaint to the police.
The Massachusetts Institute of Technology, alongside companies such as Huawei and Qualcomm, are all named as “strategic partners” of iEarn Bot, but they too said they have no knowledge of the company and they are not working with it.
On the website, the company does not provide any contact information. When the BBC checked the history of its Facebook page, we learned that until the end of 2021, the account was advertising weight-loss products. It is managed from Vietnam and Cambodia.
iEarn Bot places a big emphasis on pushing investors to recruit more people to join the app.
“The way people in this company operate is more similar to a Ponzi scheme, than an actual business,” says Ms Tabusca.
The BBC has also seen chat conversations where people, who claim to be from iEarn Bot’s customer service, told investors that in order to withdraw their money, they must pay a 30% fee.
“Some people were quite desperate to get their money back, so they paid the fee – but they still couldn’t withdraw,” says Ms Tabusca.
The BBC has repeatedly approached iEarn Bot for comment but so far it has not responded.
In some countries, such as Nigeria and Colombia, local leaders were pushed by iEarn Bot mentors – with whom they only ever communicated on Telegram – to organise recruiting events.
Andres, from Colombia, said he actively recruited people to join the app. He still believes the company is legitimate.
“They had their registration in the US that showed they were legit,” he says. “And they were paying.”
In his country, withdrawals were stopped in December. People were told the company was transforming 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. “As the local leaders did not have answers, people started to get angry.”
With the help of an analyst, the BBC managed to identify one main crypto wallet that received payments from about 13,000 potential victims, for a profit of almost $1.3m (?1m) in less than one year.
But we could not track down where and to whom the money went.
For investigators, this is a common issue.
“One of the challenges is to identify and attribute who the illicit actor is, where the value is going, and then being able to take investigative steps and law enforcement action,” says John Wyman, chief of the FBI’s new Virtual Assets Unit.
Investigations in this sort of scheme, he says, go global quickly.
Such investigations require international co-operation and may take longer, but he insists that those responsible are eventually brought to justice.
The FBI set up the Virtual Assets Unit last year in order to respond to the growing number of crimes using virtual currencies.
It invites people who have been victims of scams to make a complaint on the FBI’s dedicated page.
But law enforcement agencies maintain the best way to fight scammers remains prevention.
“Knowledge – and doing some due diligence before the investment – it’s critical,” says Mr Wyman.
“It’s like everything else: if it sounds too good to be true, it often is.”
Watch the full report on Click