About
The Washington State Department of Financial Institutions (DFI), Securities Division, has received several complaints regarding League of Whalefall LTD (“LWF”). LWF claims to be an “asset management and fintech company” and operates the TX Exchange (“TXEX”), a purported cryptocurrency trading platform. LWF and TXEX use an extensive list of domains including but not limited to lwhalefall.com, txjyhs.com, txldmc.com, txexet.com, and txexyy.com. Some of the reported domains now resolve to a webpage that contains a Cloudflare phishing warning.
Further review of the domains associated with TXEX revealed that they may be redirecting web traffic to new and potentially fraudulent websites. Other purported cryptocurrency exchanges that may be associated with TXEX include AMG Exchange, UZEX, ZZCOIN, XDCBIT Exchange, TPBIT, and HelloBit Exchange.
LWF used a recruitment-based reward structure to attract investors to TXEX. Some investors were purportedly provided with commission and were able to withdraw small amounts from the platform by bringing in new investors. The two investors that reported these entities were recruited to the platform by friends and family. The investors subsequently communicated with individuals purporting to be associated with LWF named Kevin Smith, Nacia, and Victoria through Telegram.
The investors sent cryptocurrency to various wallets associated with TXEX to fund their accounts. After earning profit, LWF told investors that they needed to pay a $400 verification fee to confirm that their account was not fraudulent. LWF told investors their TXEX accounts would be closed, resulting in a loss of their initial investments, if they did not pay the fee. DFI is not aware of any investors that were able to successfully withdraw funds from the platform after paying the verification fee.
LWF told investors recently that they would need to migrate users to a new cryptocurrency exchange called ZZCOIN because of a purported government investigation.
Mobile phone applications used by investors to access exchanges like TXEX and ZZCOIN could be malicious. The websites involved contain links to download an app which do not appear to direct the user to a reputable application marketplace like the Google Play Store or the Apple App Store. The links instead prompt users to download and install a Mobile Configuration Profile (iOS) or an Android Package Kit (.apk file) which bypass device security features.
These allegations have not been verified by DFI.
How to Avoid Becoming Victim of a Scam
DFI urges consumers to exercise extreme caution before responding to any solicitation offering investment advice or financial services. Investment professionals need to be licensed with DFI to offer investments to Washington residents. To check the licensing status and to find out if there are any complaints against an investment professional, please visit FINRA Brokercheck.
How to Report
If you believe you are a victim of this alleged scam:
- Report to FBI
- If you are outside Washington State: contact your local Securities Regulator
- If you are a Washington State resident: Submit a Complaint for statistical purposes.