Ethfinance Under Fire: Washington Watchdog Issues Fraud Alert

Share This Post

Washington state regulators are investigating Ethfinance, a crypto trading platform, after a local investor reported losing a staggering $310,000. The case raises red flags about potential crypto scams preying on unsuspecting victims through social media.

Ethfinance: Friend Request Gone Wrong

The unnamed investor, according to the Washington State Department of Financial Institutions (DFI), was introduced to Ethfinance through a “random friend request on LinkedIn.” This seemingly innocuous online interaction turned into a financial nightmare. Lured by the promise of high returns on cryptocurrency trading, the investor transferred a total of $310,000 from their DeFi wallet to Ethfinance.

However, when the investor attempted to withdraw some of their initial investment and supposed profits, things took a suspicious turn. Ethfinance’s customer service, communicating solely through Telegram messenger, demanded the investor send additional funds to complete a “smart contract” before allowing any withdrawals.

This tactic, commonly seen in advance fee scams, raises serious concerns about the platform’s legitimacy. The investor, rightfully wary, refused to send more money and has since been locked out of their account, unable to access their invested funds.

Regulator Issues Warning, More Platforms Flagged

The DFI, while emphasizing they haven’t verified all the details of the complaint, issued a public warning classifying the case as a potential “Advance Fee Fraud” scheme. These schemes often lure victims by promising high returns on investments and then require the payment of fees or taxes before any supposed earnings can be withdrawn, said a DFI spokesperson, mirroring tactics used by the US Securities and Exchange Commission (SEC) to identify similar scams.

The DFI’s alert serves as a stark reminder for Washington residents, urging them to be extremely cautious before responding to any unsolicited investment offers, especially those originating from social media or messaging apps.

Social Media And Crypto: A Breeding Ground For Scams?

The department further emphasized that any investment professional offering services to Washington residents must be licensed with the DFI. This incident isn’t an isolated case. The DFI also flagged two other crypto trading platforms, WTOCoin and Foundation-coin, for exhibiting similar red flags, including difficulties with withdrawing funds for investors.

The rise of social media platforms like LinkedIn has created new avenues for scammers to target potential victims. Cryptocurrency, with its inherent complexities and lack of mainstream regulation, can further obscure fraudulent activity. Investors, especially those new to the crypto space, are particularly vulnerable to these online tactics.

Featured image from Outseer, chart from TradingView

Read Entire Article
- Advertisement -spot_img

Related Posts

Nigeria Acts to Defend Naira After Currency Hits New Record Low

The Central Bank of Nigeria recently sold US dollars to Bureaux de Change (BDC) at a flat rate of NGN1,450 per greenback The central bank stated that eligible BDCs can sell the dollars to end-users

Bitcoin Vs. Ethereum: Why This Analyst Believes BTC Will Outperform ETH

Crypto analyst Crypto Kaleo has explained why he believes Bitcoin will continue outperforming Ethereum in the short term He made this assertion based on his belief that the Spot Ethereum ETFs will

Messari CEO Selkis Resigns After Controversial Political Posts

Ryan Selkis, founder of Messari, has stepped down as CEO, following controversial social media posts He will transition to Senior Advisor, while Eric Turner takes over as interim CEO “This week

Is $200 Within Reach For Solana Price? Here’s Why This Blockchain Firm Thinks So

Like the general crypto market, the price of Solana (SOL) witnessed significant growth over the past week According to the latest on-chain data, this might only be the beginning for SOL’s price,

US Senator Highlights Bitcoin as Currency Unaffected by Widespread Cyber Outages

US Senator Cynthia Lummis has emphasized bitcoin’s resilience as a form of currency unaffected by widespread cyber outages Her remarks followed major system failures linked to Crowdstrike,

Microsoft Outage Draws Criticism From Crypto Community, Is Shiba Inu The Answer?

The team behind Shiba Inu recently took a swipe at Microsoft, one of the largest companies in the world Microsoft just had the largest IT outage in history on Friday, July 19 Businesses around the