An unsuspecting investor has reportedly lost a whopping $310,000 on a questionable cryptocurrency trading platform, learning about it through an unsolicited LinkedIn connection request. The alert was raised by the Washington State Department of Financial Institutions (DFI) Securities Division, stating that the investor strayed into a purported crypto trading platform — Ethfinance — and subsequently stashed a sizable $310,000 from his DeFi wallet on the platform in anticipation of handsome crypto trading profits.
However, when the investor tried to withdraw both, the initial principal and the promised profits, he was misguided into depositing more funds to meet the criteria of a “smart contract” to facilitate the withdrawal. Refusing to send more funds led to his account getting locked, consequently unable to withdraw any of the invested funds.
EthFinance, the alleged fraudulent exchange, remains accessible online. The DFI suggests that this might be a case of “Advance Fee Fraud”, which involves the fraudster promising their victims a large sum of money or high-value services against an upfront fee, only to disappear once the fee is paid.
The platform had previously been flagged by another user; a California resident who reported a loss of over $165,000 after being ensnared by an online stranger offering lessons on crypto option trading. The fraud was exposed when the victim was asked to remit 25% of the profits as “taxes” by the “CEO of Crypto Customer Service” over Telegram for withdrawal completion.
On the same day, the Washington DFI issued three more alerts – two regarding fictitious crypto exchanges, and one related to a fraudulent investment management platform.