The Washington State Department of Financial Institutions (DFI), Securities Division has received a complaint from a Washington resident regarding the CSE-K trading platform (https://cse-kcrypto.co) and C3-Griffin AI Data Investment Group (“C3-Griffin”). It appears that the CSE-K trading platform website has been taken down.
Scam Details
The investor learned about the CSE-K trading platform from an online advertisement. Subsequently, the investor communicated about the investment over a messaging application such as WhatsApp or Telegram. C3-Griffin claimed they could predict profits by using AI to invest in “crypto contracts” on the CSE-K trading platform. C3-Griffin instructed the investor on when to trade, how much to invest, and when to close a trade. The investor was instructed to send funds to their Coinbase account, convert the funds into Ethereum (“ETH”), and send the ETH to the CSE-K trading platform where the cryptocurrency contracts were made.
After a few trades, the investor saw large, purported gains in their CSE-K account. Eventually, the investor lost nearly all their investment. C3-Griffin explained the losses were a result of a “whale” that invested a large amount of money.
After experiencing losses in their account, C3-Griffin told the investor they could become the “whale” by offering six different investment options: Shrimp ($100,000), Fish ($200,000), Dolphin ($300,000), Shark ($500,000), Whale ($1,000,000), and Humpback Whale ($2,000,000). The investor was told the more money they invested, the more money they would make.
After investing $480,000 on the CSE-K trading platform, the investor is unable to withdraw funds from their account.
Possible Recovery Scam
In an attempt to recover their funds, the investor hired a firm called “Scam Helpers.” After paying a $25,000 fee, Scam Helpers claimed to have traced the investor’s funds to a variety of exchanges but claimed they are unable to recover funds without the help of law enforcement.
The investor also opened an account with QFS Patriots Ledger (“QFS”) (https://qfspatriotsledger.co), an exchange that claimed they could recover the investors funds using artificial intelligence. QFS charged $15,000 for their service. After the investor paid the fee, QFS claimed they recovered the investor’s $480,000 but was only able to withdraw $100,000 at a time. QFS demanded the investor pay $15,000 for each $100,000 withdrawal from the investor’s CSE-K account. The investor refused to pay the fee and is unable to recover funds from QFS or their CSE-K trading account.
These allegations have not been verified by DFI.
Type of Scam(s)
This appears to be what is commonly called “Advanced Fee Fraud”, which can take many forms. This also appears to be what is commonly called an “Asset Recovery Scam” which is a scam by a third party requiring a fee to purportedly recover lost funds in a prior fraudulent transaction.
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.
Filing 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