The Washington State Department of Financial Institutions (DFI), Securities Division has received a complaint from a Washington resident stating that YFI, an alleged cryptocurrency lending platform, using the website https://www.yfiapp.top, may be engaged in fraud.
According to the YFI website, “YFI is an ecosystem of smart contracts running on the Ethereum blockchain that allows the creation of fully decentralized reserve pools” and users can “deposit certain assets into a shared reserve pool, and earn interest paid by the interest of users willing to borrow certain assets from the reserve pool.”
Scam Details
The investor wired over $37,000 to their Coinbase wallet, purchased USDC, and subsequently forwarded the USDC to their YFI account. The funds were used to invest in a YFI USDC VP Smart Contract. According to information the investor found on YFI, YFI said that USDC pays a daily interest of 0.8% if you invest up to $30,000 or a daily interest of 1% if you invest more than 30,000 USDC. Once the funds were deposited, YFI told the investor they received a reward of 2 Ether (“ETH”) in their YFI savings account.
After receiving the ETH, YFI congratulated the investor on participating in a “randomly distributed lucky activity” that involved investing in a “10 day, 99999 USDC level VIP3 double profit smart contract.” Once the investor completed the contract amount, YFI claimed the investor would receive double their previous savings profit and 11 ETH as a reward.
YFI instructed the investor to convert the 2 ETH they received as a reward into USDC and send the USDC to the double profit smart contract. Due to participating in the double profit smart contract, all the investor’s funds in their wallet, a total of over 37,000 USDC, were automatically transferred into the double profit smart contract. YFI notified the investor that to complete the double profit smart contract and receive the profits, the investor needed to deposit over 62,000 USDC. The investor never agreed to or asked to participate in the double profit smart contract and asked for their funds to be removed from the smart contract. YFI refused to do so, stating that the investor agreed to participate in the double profit smart contract when they clicked OK on a popup about the “lucky activity.”
YFI continued to pressure the investor to deposit the remaining contract amount of over $62,000, including threatening to freeze the investor’s funds if they did not deposit the remaining USDC. The investor refused to deposit the remaining amount of USDC and is unable to access their funds.
The investor communicated with YFI on WhatsApp. The WhatsApp number is (929) 647-0640 and the group name is “USDC VP.” Prior to investing, while gathering their funds, USDC VP notified the investor that YFI changed its domain name, claiming it was a requirement of Coinbase.
These allegations have not been verified by DFI.
Type of Scam(s)
This appears to be what is commonly called a Pig Butchering Scheme.
How to Check Licensing Status
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.
How to File a Complaint
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
Protecting Yourself from Financial Fraud
Virtual Currency, Cryptocurrency, and Digital Assets Information for Consumers