Thousands may have lost on the crypto trading app

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, and people have often been promised large rewards over short periods of time.

But law enforcement agencies warn of a growing number of scams and advise investors to carry out due diligence.

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 be identified as she fears her professional reputation could be damaged.

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

“I invested in a fine for one month,” Roxana tells the BBC. “You could see in the app how many dollars the app generated: there were graphics that showed how the investment was going.

“It looked pretty professional until at one point they announced maintenance.” At that point, withdrawals from the app were frozen for some time.

“Someone started saying ‘I can’t withdraw… what’s going on’,” explains Roxana. “I made the request to withdraw and the money just disappeared. The portfolio became zero – but I was never credited with money in my wallet.”

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

Garais says he was also duped into investing his own savings in the app and lost his money.

But Roxana insists, had it not been for Garai’s sponsorship, she would never have considered investing.

“We had the knowledge to think this might be a scam,” she says, “but the fact that there was a reputable 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 incident. Nor is it 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 in the scheme.

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

– Based on what we have seen, the number of investors is quite high, she says. “In Indonesia, for example, they have [iEarn Bot] claims they had 800,000 customers.”

“At first, the app works really well,” says 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 up 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 the website names as the company’s founder told us he had never heard of them. He said he has lodged a complaint with the police.

The Massachusetts Institute of Technology, along with companies such as Huawei and Qualcomm, are all named as “strategic partners” of iEarn Bot, but they also said they have no knowledge of the company and are not working with it.

The company does not provide any contact information on the website. When the BBC checked the history of its Facebook page, we learned that until the end of 2021 the account advertised weight loss products. It is administered 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 operate is more like a Ponzi scheme than an actual business,” says Tabusca.

The BBC has also seen chat conversations where people, claiming to be from iEarn Bot’s customer service, told investors that in order to withdraw their money, they would have to 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 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 pressured 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. He still believes the company is legitimate.

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

In his country, withdrawals were stopped in December. People were told that the company was transforming investments 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 a loan to invest. They used money from other sources, many were affected, says Andres. As the local leaders had no answers, people began to get angry.

With the help of an analyst, the BBC was able to identify one main 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 we could not trace where and to whom the money went.

For investigators, this is a common problem.

“One of the challenges is identifying and attributing who the illegal actor is, where the value is going, and then being able to take investigative steps and law enforcement action,” said John Wyman, the FBI’s new virtual assets director.

Investigations into this type of arrangement, he says, are rapidly progressing globally.

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

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

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

But law enforcement agencies maintain the best way to combat fraudsters remains prevention.

“Knowledge — and doing some due diligence before the investment — that’s critical,” says Wyman.

“It’s like anything else: if it sounds too good to be true, it often is.”

See the full report at Click