Bitrabo Editorial
Washington state regulators are looking into Ethfinance, a cryptocurrency trading platform, following a report of a local investor losing $310,000. The incident highlights concerns about potential crypto scams targeting individuals through social media.
Ethfinance: Investor’s Costly Friend Request
The investor, who remains anonymous, was introduced to Ethfinance via a random LinkedIn friend request. What started as a harmless online connection turned into a financial disaster. Enticed by promises of high profits from crypto trading, the investor transferred $310,000 from their DeFi wallet to Ethfinance.
When attempting to withdraw some funds and profits, the investor faced suspicions. Ethfinance’s customer service, communicating only through Telegram, insisted on additional payments to complete a supposed smart contract before allowing withdrawals.
This request, a common tactic in advance fee scams, raised significant doubts about the platform’s legitimacy. The cautious investor declined to send more money, resulting in being locked out of their account with no access to their invested funds.
Regulator Warns of Fraudulent Practices
While the Washington DFI hasn’t fully verified the complaint details, they issued a public alert categorizing the incident as a potential Advance Fee Fraud scheme. These schemes entice victims with high investment returns but demand fees or taxes before allowing any withdrawals, echoing strategies used by the SEC to identify similar scams.
The DFI’s warning reminds Washington residents to be cautious with unsolicited investment offers, particularly those from social media or messaging platforms.
Social Media And Crypto: Vulnerabilities to Scams
The DFI stressed that any investment professional serving Washington residents must be licensed with the department. This case isn’t an isolated incident, as the DFI also flagged WTOCoin and Foundation-coin for withdrawal issues for investors.
The emergence of platforms like LinkedIn provides scammers with more ways to target victims. The complexity of cryptocurrency and limited regulation make it easier for fraudulent activities to go undetected. New investors in the crypto market are especially at risk of falling for these online schemes.
Featured image from Outseer, chart from TradingView