Date Posted: 
Monday, April 29, 2024

The Washington State Department of Financial Institutions (DFI), Securities Division has received a complaint regarding, a website claiming to be “The world’s leading digital asset trading platform.” A notice on the website states that all investments on the platform are under joint supervision of “ERGER European Regulators.”

The investor learned of from an individual (“Alexander Kovac”) that they matched with on the dating website, Feeld.  Subsequently, the investor communicated with Kovac exclusively through Instagram.  After a few days of communicating, Kovac mentioned their “side hustle” of trading cryptocurrency and stated that they could assist the investor in paying off debt. The investments into started small. The investor claimed they felt “love-bombed” and pressured by Kovac into continuing to invest additional funds. The investor invested a total of approximately $16,000 through the website over a 2-month timespan. 

Kovac refused to speak over the phone or on video call and insisted he wanted to reserve their first meeting with the investor for in person, assuring the investor they would be meeting soon.  The investments started becoming increasingly larger as the investor was promised “financial freedom.” At one point, the profit displayed on the platform was over $167,000.

Kovac eventually guided the investor through the withdrawal process but the investor did not see the funds reach their wallet. Kovac advised the investor to contact customer service at which point they received a notification that a 20% “profit tax” needed to be paid to the currency wallet of the exchange “regulated by the International Monetary Fund” before funds could be released. (Note: Fraudulent Cryptocurrency websites may refer to entities like the International Monetary Fund – IMF to legitimize their trading platforms. The IMF does not regulate cryptocurrency exchanges). The investor was provided a deadline to pay $33,000 and told a 1% late fee would be charged after the deadline as well as an impact to the investor’s credit score. When informed about the situation, Kovac seemed unconcerned, told the investor to ask their family for money and offered to contribute $5,000 to the fee.

The investor confronted Kovac about potentially being a scam after which point Kovac stopped communication and removed the investor as a friend on their private Instagram profile. The investor has been unable to withdraw their funds.  These allegations have not been verified by DFI. 

This appears to be what are commonly called Advance Fee Fraud, a Pig Butchering Scheme, and/or a Romance Scam, which can take many forms.

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 formal complaint with the Securities Division.

Additional Resources

Virtual Currency, Cryptocurrency, and Digital Assets Information for Consumers

Information regarding investing strategies, investment products, and how to protect yourself from fraud

What You Can Do to Avoid Investment Fraud