An investor claimed to have lost $310,000 on an allegedly fraudulent crypto trading platform after learning about it from an unsolicited LinkedIn connection request. The Washington State Department of Financial Institutions (DFI) Securities Division issued a consumer alert on June 13, stating that the investor used a so-called crypto trading platform named Ethfinance.
Beware of Fake Exchange Platforms
The DFI stated that the investor learned about Ethfinance through a random friend request on LinkedIn. It was also mentioned that the investor transferred a total of $310,000 from their DeFi wallet to the platform in hopes of profiting from crypto trading.
When the investor tried to withdraw their initial principal and a portion of the reported profits, they were told to add more funds to complete the smart contract and then withdraw the money. The DFI reported that the investor was unable to withdraw any funds from their account, which was subsequently locked.
Although the regulator noted that the claims were unverified, it suggested that the case appeared to be an Advance Fee Fraud. Advance fee fraud is a type of scam where victims are promised significant amounts of money, products, or services in exchange for a small upfront payment. After the payment is made, the scammer either convinces the victim to send more money for other fees or disappears altogether.
Details of the Process
Washington DFI’s crypto fraud tracker shows that the platform was mentioned in a previous complaint; a California resident reported losing over $165,000 after meeting a stranger online who offered to teach them how to make money through crypto options trading.
The investor realized it was a scam when asked to send 25% of the profits as tax to complete the withdrawal by the CEO of Crypto Customer Service on Telegram. Washington DFI also issued three more warnings on June 13. Two of these were for allegedly fake crypto exchanges, and the other was related to a fake investment management platform.
