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.
Total crypto market cap at $2.38 trillion on the daily chart: TradingView.com
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withdrawn,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
Go to Source
Author: Christian Encila
