Washington DFI issues public alert on Ethfinance over alleged fee fraud

Washington State DFI has issued a public alert regarding a $310,000 crypto fraud scheme involving a crypto exchange.

The Washington State Department of Financial Institutions (DFI), Securities Division received a complaint after an investor was unable to withdraw $310,000 worth of cryptocurrency from Ethfinance, a purported crypto trading platform. In a June 13 press release, DFI said an unidentified investor was introduced to Ethfinance “through a random friend request on LinkedIn.”

“In total, the investor transferred approximately $310,000 using his password. [decentralized finance] He transferred his wallet to Ethfinance because he thought he would make a huge profit from cryptocurrency trading.”

etfinance

When the investor attempted to withdraw some of his initial principal and claimed profits, he was directed by Ethfinance’s customer service department, contacted via Telegram messenger, to add more funds to complete a “smart contract” before withdrawing any funds (DFI). says. The investor refused to send additional funds and has since been unable to access his account, which is now locked.

The regulator said it had not confirmed the allegations but warned the case resembled an “Advance Fee Scam”, where fraudsters demand up-front payment for promised services or profits that never materialize.

According to the U.S. Securities and Exchange Commission, such programs often lure victims by promising high returns on investments and then require the payment of fees or taxes before the purported winnings can be withdrawn.

In addition to Ethfinance, DFI has issued public warnings against crypto trading platforms WTOCoin and Foundation-coin, stating that these platforms also encourage victims to deposit crypto and then deny them withdrawal access.

DFI urged consumers to exercise extreme caution before responding to any solicitation offering investment or financial services, adding that investment professionals must be licensed from DFI to offer investments to Washington residents.