The Washington State Department of Financial Institutions (DFI), Securities Division has received a complaint from a Washington resident regarding Foundry. Foundry has websites at www.foundryex.net, www.foundryus.com, and www.foundryteam.com. Foundry claims to be a “global leading digital asset service platform.”
The investor was introduced to Foundry from Yonghan Zeng (“Zeng”). Zeng claimed to be part of a consortium led by her aunt who is a senior executive for Morgan Stanley. Zeng’s aunt gave approval for the investor to participate in cryptocurrency mining investment opportunities with the consortium on Foundry. Zeng sent the investor a link to the Foundry website (www.foundryex.net) to start an account. The investor was given a chance to first participate in “live investment opportunities” using a demo account. After seeing large returns using the demo account, the investor started to invest on Foundry. The investor created accounts at Crypto.com and Bitstamp.
The investor was notified of investment opportunities over WhatsApp. To invest, the investor wired funds to their Crypto.com or Bitstamp accounts, purchased Tether (“USDT”) and subsequently transferred the USDT to their Foundry account to invest with. After initially investing $10,000, the investor’s Foundry account purportedly grew to over $17,000 within a short period of time. The investor participated in several more cryptocurrency mining investment opportunities, investing over $530,000. The investor’s Foundry account purportedly grew to over $2 million dollars.
When the investor attempted to withdraw funds from their Foundry account, Foundry customer service demanded the investor pay a verification deposit stating they were suspicious of the large returns the investor was making. The verification deposit was 25% of the investor’s Foundry account or $500,000. After paying the verification deposit, the investor attempted again to withdraw funds from their Foundry account. Foundry customer service demanded the investor pay taxes on the profits made from their cryptocurrency mining investments. The amount was 27% of their profits or $355,688. Foundry customer service told the investor they could wire the tax payment to a U.S. bank or Hong Kong bank account. They claimed that if the investor wires the tax payment to their Hong Kong bank account, they would provide the investor a tax refund, saving the investor approximately $200,000 in taxes. The investor wired funds to a Hong Kong bank account, to a company named “Tianhongyu Trading Co Limited.”
After wiring the funds, the investor attempted to withdraw funds again. Foundry customer service claimed that the Hong Kong Monetary Authority had placed a 90-day hold on the wire transfer. Foundry customer service pressured the investor to send $300,000 to set up a private banking account in order to make withdrawals from their Foundry account more efficient. The investor refused to do so.
The investor attempted to withdraw funds from Foundry to their Coinbase wallet. The USDT tokens appeared to transfer but the investor was informed the tokens that transferred were fake. The investor has lost nearly $1,400,000.
The investor was instructed to send all cryptocurrency investments to the following Foundry cryptocurrency wallet: 0xFe32871453D1e2D15109747A4cA72D9b1Ec80B7E.
The following is the wallet that transferred the fake tokens: 0x8a9F9AfF4998f046b9912D6D518305dCF0538dE4.
This appears to be what is commonly called “Advance Fee Fraud”, which can take many forms. It also appears to be what is commonly called a Pig Butchering Scheme.
DFI urges consumers to exercise extreme caution before responding to any solicitation offering investment or financial services. Investment professionals need to be licensed with DFI to offer investments to Washington residents. In addition, most investment products sold need to be registered with DFI. To check the licensing status and to find out if there are any complaints against an investment professional or investment product, please visit FINRA Brokercheck or contact the Washington State Department of Financial Institutions, Securities Division at (360) 902-8760. If you live outside of Washington State, contact your state securities regulator.
If a consumer believes a person or company has violated state law or acted improperly regarding an investment product or service, they may file a complaint with the Securities Division.
Additional Resources
Virtual Currency, Cryptocurrency, and Digital Assets Information for Consumers