The Washington State Department of Financial Institutions (DFI) has issued a public alert regarding a cryptocurrency scam involving Ethfinance, which allegedly defrauded an investor of $310,000.

According to the DFI's statement on June 13, an investor was introduced to Ethfinance through an unsolicited connection on LinkedIn. The investor transferred approximately $310,000 from their decentralized finance (DeFi) wallet to Ethfinance, believing they could profit from cryptocurrency trading.

However, when the investor attempted to withdraw their initial investment and profits, Ethfinance's customer service, communicating via Telegram, instructed them to add more funds to complete a "smart contract" before any withdrawals could be processed. Sensing potential fraud, the investor refused to send additional funds. Subsequently, the investor lost access to their account, which was locked by Ethfinance.

While the DFI has not independently verified these allegations, it warned that the situation resembles "Advance Fee Fraud." This type of fraud typically involves scammers promising high returns on investments but requiring victims to pay fees or taxes upfront, with victims often unable to access their funds as promised.

Alongside Ethfinance, the DFI issued public alerts concerning two other crypto trading platforms, WTOCoin and Foundation-coin, suspected of similar fraudulent practices. These platforms reportedly lure victims into depositing cryptocurrencies under false pretenses and then deny them access to their funds.

In response, the DFI advised consumers to exercise extreme caution when approached with unsolicited investment offers. It emphasized that investment professionals must be licensed with the DFI to legally offer investments to residents of Washington State.

This alert serves as a reminder of the risks associated with unverified cryptocurrency platforms and unsolicited investment solicitations. As regulatory authorities continue to investigate such cases, consumers are urged to conduct thorough research and seek licensed professionals before engaging in financial transactions involving cryptocurrencies.