TLDR
- An investor lost $310,000 on a suspected crypto trading scam platform called Ethfinance.
- The investor learned about Ethfinance through an unsolicited LinkedIn connection request.
- After transferring funds to the platform, the investor was unable to withdraw money and was told to send more funds to complete a “smart contract.”
- The Washington State Department of Financial Institutions (DFI) issued a consumer alert about Ethfinance, suggesting it may be an advance fee fraud case.
- The DFI also issued warnings about other suspected fraudulent crypto platforms and received previous complaints about Ethfinance, including one investor losing over $165,000.
A Washington-based investor has reportedly lost $310,000 in what appears to be a crypto trading scam involving a platform called Ethfinance.
The incident has caught the attention of the Washington State Department of Financial Institutions (DFI), which has launched an investigation into the matter.
According to the DFI’s consumer alert, the investor first learned about Ethfinance through an unsolicited connection request on LinkedIn.
Intrigued by the prospect of profiting from crypto trading, the investor transferred a total of $310,000 from their decentralized finance (DeFi) wallet to the Ethfinance platform.
However, when the investor attempted to withdraw a portion of their initial investment and reported gains, they encountered a concerning roadblock.
The platform allegedly told the investor that they needed to send additional funds to complete a “smart contract” before they could make any withdrawals.
Recognizing this as a potential red flag, the investor refused to send more money. As a result, the investor claimed that their account on the Ethfinance platform was subsequently locked, leaving them with no access to their funds.
The DFI has labeled this case as a suspected “advance fee fraud,” a type of scam where victims are promised significant returns or services in exchange for an upfront payment.
Once the payment is made, the scammers either disappear or continue to demand additional fees under various pretexts, effectively draining the victim’s funds.
While the allegations against Ethfinance have not been officially confirmed, the DFI’s crypto fraud tracker has revealed that the platform was mentioned in a previous complaint.
In that case, a California resident reported losing over $165,000 after being approached by a stranger online who offered to teach them how to make money through crypto options trading.
The Washington DFI has also issued three additional warnings on June 13, highlighting the prevalence of potential crypto scams.
Two of these warnings were related to suspected fraudulent crypto exchange platforms similar to Ethfinance, while the third warning concerned a purported investment management platform.
As the investigation into Ethfinance continues, the DFI’s actions serve as a reminder of the importance of exercising caution when engaging with unsolicited offers or platforms in the crypto space.
