Washington DFI is Investigating $300K Crypto Scam

Following an alleged $300K crypto scam involving an investor, the Washington DFI is investigating the crime.

The Washington State Department of Financial Institutions (DFI) is currently investigating “Ethfinance,” a cryptocurrency exchange that may be fraudulent. According to the agency, an investor complained to the agency after losing $310,000 on the platform.

From LinkedIn Lead to Significant Loss

The investor discovered Ethfinance through a haphazard LinkedIn friend request, as indicated by a DFI consumer alert. Nevertheless, it did not conclude there. The investor ultimately transferred a total of $310,000 from their DeFi wallet to the platform, with the expectation of achieving substantial profits in the cryptocurrency trading market.

The investor encountered complications when they attempted to withdraw a portion of their initial investment and reported gains, as outlined by Washington DFI. The complainant was confronted with one of the most ancient fraud tactics. They were required to transfer additional funds to finalize a “smart contract” before withdrawal. The investor refused to submit any extra funds, as they recognized this as a potential scam tactic. The investor subsequently claimed they could no longer access their funds because they were kept out of their account.

The Washington DFI has designated the case as “Advance Fee Fraud”

According to the DFI, this case has all the characteristics of an “Advance Fee Fraud.” That type of scam targets victims by promising high returns in exchange for advance payments. Scammers either decide to flee with the money or press their luck by making additional demands under various pretexts after the initial payment.

In the interim, the DFI’s crypto fraud tracker discloses a previous complaint against Ethfinance, which bolsters this case’s credibility. Another victim, a California resident, was reportedly defrauded by more than $165,000 in a comparable scheme involving a stranger who provided trading lessons for crypto options. The victim was only informed that they had been scammed after being requested to submit 25% of the profits they had yet to withdraw.

On June 13, the Washington DFI issued three additional advisories. The third was about a fraudulent investment management platform, while the first two were for purportedly shady crypto exchange platforms, such as Ethfinance.

These incidents underscore the significance of investor vigilance and the increasing prevalence of crypto schemes. Investors can reduce their susceptibility to fraudulent schemes by maintaining a healthy skepticism and remaining informed.