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 crypto scams that can prey on unsuspecting victims through social media.
Ethfinance: Friend Request Failed
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 harmless online transaction has turned into a financial nightmare. Attracted by the promise of high returns on cryptocurrency trading, the investor transferred a total of $310,000 from his DeFi fund to Ethfinance.
However, when the investor tried to withdraw some of his initial investment and what he thought was a profit, things started to get suspicious. Ethfinance’s customer service, communicating only through Telegram messenger, demanded that the investor send additional funds to complete the “smart contract” before allowing any withdrawal.
This tactic, often foreseen by money scams, raises serious concerns about the legitimacy of the platform. The investor, rightly cautious, refused to send any more money and since then he has been locked out of his account, unable to access his investments.
Total crypto market cap at $2.38 trillion on the daily chart: TradingView.com
Administrator Issues Alert, Multiple Platforms Flagged
The DFI, while stressing that it has not verified all the details of the complaint, has issued a public warning framing the case as a possible “Advance Money Fraud” scheme. These schemes often lure victims by promising high returns on investments and then require the payment of fees or taxes before any proceeds are withdrawn, said a DFI spokesperson, citing tactics used by the US Securities and Exchange Commission (SEC) to identify similar scams. .
DFI’s warning serves as a strong reminder to Washington residents, urging them to exercise extreme caution before responding to any unsolicited investment offers, especially those from social media or messaging apps.
Social Media and Crypto: A Breeding Ground for Scams?
The department also emphasized that any investment professional providing services to Washington residents must be licensed with the DFI. This incident is not an isolated incident. The DFI has also flagged two other crypto trading platforms, WTOCoin and Foundation-coin, for showing similar red flags, including difficulties in withdrawing funds for investors.
The rise of social networking sites like LinkedIn has created new ways for scammers to target potential victims. Cryptocurrency, with its inherent complexity and lack of general rules, can further hide fraudulent activity. Investors, especially those new to the crypto space, are very vulnerable to these online tactics.
Featured image from Outseer, chart from TradingView
Source link
