DFI announced in its June 13 press release that an unidentified investor was introduced to Ethfinance “via a random friend request on LinkedIn.” This reveals that social media platforms are frequently used by fraudsters. Investors should be wary of investment opportunities, especially from people they do not know, and should always conduct thorough research.

According to DFI, when the investor tried to withdraw the initial investment amount and some of the profits made, Ethfinance’s customer service department (contacted via Telegram) told him that he had to add more funds to complete the “smart contract” before he could withdraw any money. This “smart contract” requirement is a sign of a classic “Payment-Based Fraud” method. Scammers attempt to trick victims into paying additional money to supposedly complete the transaction or access winnings. 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 that the case was similar to this method of fraud.

Such schemes often lure victims by promising high returns on investments and then require them to pay fees or taxes before the purported winnings can be withdrawn, according to the U.S. Securities and Exchange Commission. At this point, it is important for investors to investigate whether the return rates offered to them are realistic. Promises of very high returns are often a sign of a scam.

In addition to Ethfinance, DFI also warned the public against crypto trading platforms WTOCoin and Foundation-coin. It was stated that these platforms also encourage investors to deposit cryptocurrencies and then refuse to withdraw money. This suggests that investors should be wary of newly established or little-known cryptocurrency platforms. To choose a reliable platform, it will be useful to review user comments and research the history of the platform.

DFI emphasized that consumers should exercise extreme caution before responding to any offer offering investment or financial services, adding that investment professionals must be licensed with DFI to offer investments to Washington residents. This warning underlines that investors should only cooperate with licensed and reliable institutions. Information about licensed investment professionals can be found on the websites of institutions such as DFI.

As a result, this warning from Washington State is important to raise awareness of cryptocurrency investors against fraudulent methods they may face. Investors should be wary of random offers from social media platforms, do not believe promises of high returns, be wary of newly established platforms and cooperate only with licensed investment professionals. Remember, spotting the scam early can help you avoid becoming a victim of scammers.