A financial backer alleges losing $310,000 to a suspected deceptive cryptocurrency trading platform after being introduced to it through an unsolicited LinkedIn connection request.
According to a cautionary statement from the Securities Division of the Washington State Department of Financial Institutions (DFI) on June 13, the investor had engaged with a purported cryptocurrency trading platform named “Ethfinance.”
The DFI revealed that the investor came across Ethfinance through a random friend request on LinkedIn. The investor proceeded to transfer a sum of $310,000 from their “DeFi wallet” to the platform with the expectation of making profits from cryptocurrency trading.
However, when the investor tried to withdraw some of the initial capital and reported earnings, they were informed that they needed to add more funds to finalize the “smart contract” before being able to withdraw funds.
Despite the request for additional funds, the investor did not comply. As a result, the investor has not been able to withdraw any funds from their account, which has since been locked, as stated by the DFI.
Although the DFI has not confirmed the allegations, it suspects that the case may involve Advance Fee Fraud. This type of scam typically promises victims substantial sums of money, products, or services in exchange for a small upfront payment. Once the payment is made, the scammer may demand additional fees or simply vanish.
Additionally, the Washington DFI’s crypto scam tracker indicated that the platform had been mentioned in a previous complaint, where a California resident reported losing over $165,000 after encountering a stranger online who offered to provide guidance on making money through cryptocurrency options trading.
The California resident became aware of the scam when the “CEO of Crypto Customer Service” on Telegram requested 25% of the profits as “taxes” to facilitate the withdrawal.
On the same day, the Washington DFI issued three more alerts, two of which were related to suspected fraudulent cryptocurrency exchanges, while the third pertained to a deceitful investment management platform.