“ICHCoin”: FBI investigates multi-million dollar cryptocurrency scam

by cryptheory

October 7, 2024

Reading Time: 3 mins read

The FBI has launched a comprehensive investigation into a sophisticated cryptocurrency scam involving the fraudulent platform ICHCoin. The scheme is said to have led to the embezzlement of over $30 million from victims across the United States.

The scam began in December 2023 and targeted nearly 600 individuals, many of whom lost their entire savings to the fraud.

Amanda Culver, an FBI agent based in Houston, labeled ICHCoin as a “scam” and a “fraud.” The U.S. investigative agency is now urging more victims to come forward.

The FBI is asking all victims of ICHCoin or similar cryptocurrency-related scams to step forward. In fact, there is a questionnaire on the agency’s website for victims to report their experiences.

How the ICHCoin scam works

The ICHCoin scam operates through a methodical and well-calculated approach, primarily targeting users on social media platforms like Facebook and Instagram.

First, the scammers make contact with potential victims through fake profiles, offering what appears to be advice or even courses on cryptocurrency investments.

This initial contact is aimed at gaining the victim’s trust. Once the interaction progresses, the scam shifts to messaging apps like WhatsApp, where the victim is introduced to a “cryptocurrency expert” who provides step-by-step guidance on how to invest.

Soon, victims are persuaded to transfer large sums of money to the ICHCoin platform.

The FBI agent explained that individuals targeted by the scam can even be manipulated into lying to their banks about the nature of the transactions.

After the funds are transferred, victims are still able to track their supposed investments through the ICHCoin app.

However, this app provides only the illusion of profits from fake investments. When victims attempt to withdraw their funds or collect their earnings, they are met with silence. In short, the scammers stop responding, or they freeze the accounts, preventing users from recovering their money.

For most victims, the realization that they have fallen into a scam comes too late, after their savings have already been funneled into the fraudulent system.

According to Culver, the scam is highly sophisticated and can deceive anyone:

“The average person could certainly fall victim to this scam.”

So far, the FBI has identified victims only in Houston. However, they are investigating whether more people across the U.S. have fallen prey to the scheme.

FBI intensifies efforts against cryptocurrency frauds

Cryptocurrency frauds have become a significant focus for the FBI, as millions of dollars continue to be lost to these scams every year in the U.S.

In response to the growing number of cases, the bureau has stepped up its crackdown on fraudulent cryptocurrency platforms. In September alone, the FBI issued several warnings about the rise in crypto-related scams.

However, the problem isn’t new. For instance, the FBI’s Internet Crime Complaint Center (IC3) recently reported that losses in 2023 exceeded $5.6 billion.

Crimes related to cryptocurrencies accounted for nearly half of the total losses. The majority of these were linked to investment scams, which saw a 53% increase, rising from $2.57 billion in 2022 to $3.96 billion in 2023.

Most complaints came from individuals aged 30 to 49, who are more likely to be interested in cryptocurrencies. However, older victims, particularly those over 60, experienced the most significant financial impact, with losses exceeding $1.24 billion last year.

In the case of ICHCoin, Culver noted that the FBI investigation is still ongoing. The agency is following leads to determine whether the scammers are located in the U.S. or abroad.

While the precise identities of the criminals have not yet been uncovered, the investigative service is determined to bring those responsible to justice.

Additionally, the FBI issued a warning to Americans about using unregistered cryptocurrency services. It advises users to only utilize platforms that comply with Anti-Money Laundering (AML) regulations.

Hackers also pose a threat

Investment scams designed to steal money from victims are not the only form of cryptocurrency fraud. Legitimate crypto platforms, both centralized and decentralized, have also been facing significant security challenges.

According to data from PeckShield, hackers stole more than $120 million through cyberattacks on cryptocurrency platforms in September alone. This figure represents the total stolen in a series of attacks, including 20 major incidents.

Among the most notable cases were platforms like BingX, Penpie, and Indodax. Together, these hacks caused total losses of $90 million.

Such attacks are part of a growing trend, exploiting security vulnerabilities in the cryptocurrency business. They contributed to a staggering $409 million in losses during the third quarter of 2024, according to a recent report by Immunefi.

Immunefi’s study found that centralized finance (CeFi) platforms are particularly vulnerable to large-scale security breaches. As a result, these services were primarily responsible for the high volume of funds stolen.