Date Posted:
Monday, September 9, 2024
The Washington State Department of Financial Institutions (DFI), Securities Division has received a complaint from a Washington investor about a cryptocurrency mining platforms and wallet that may be imposter sites. This scam may be associated with another scam that was the subject of a previous investor alert.
Scam Details
- Investor Connection: The investor met someone online named “Frank.”
- Investment: Through Frank, the investor invested over $300,000 to mine USDT (Tether) on a platform called “Halo” (Note: Only Bitcoin can be mined).
- "Withheld Taxes:" In addition to this principal amount, the investor added over $65,000 upfront as “withheld taxes.”
- Attempts To Withdraw: When his investment rose to $1.4 million, the investor tried withdrawing some of his earnings. He communicated with Halo customer support, who then informed him he needed to pay taxes and gas fees to withdraw the funds. They instructed him to open a “Bitkeep” wallet.
- Paying Taxes: The investor paid at least $50,000 in taxes into that wallet, but continued experiencing issues withdrawing his funds.
- Wallet Name Changes: During this process, the investor said that Bitkeep changed its name multiple times, to Getbit, Gitbit, and Bitget.
- Recovery Attempts: Frank informed the investor that he could recover the investor’s funds. The investor paid Frank two ETH, worth approximately $7,000 at the time, for the recovery. The investor was subsequently unable to access his wallet.
- Total Investment Lost: The investor claims to have invested over $750,000 in this possible scam. He liquidated his 401(k) retirement account, borrowed from family, and maxed out the cash advance limits on his credit cards to pay for his investment. He has been unable to withdraw his funds and has lost his entire investment.
Type of Scam
This case contains hallmarks of several types of common scams, including advance fee fraud, pig butchering, and refund and recovery scams.
Communication Methods
- The investor communicated with the scammers through the social media apps Telegram and WhatsApp.
What DFI Knows
- DFI has not verified these allegations. DFI has also not verified the legitimacy of the platform and wallets that were used in this scam, including whether they are impersonating other similarly-named platforms or wallets.
- 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.
Check Licensing Status
- Visit FINRA Brokercheck or contact DFI Securities Division at (360) 902-8760.
- For out-of-state residents, contact your state securities regulator.
Filing a Complaint
- If you believe a person or company has violated state law regarding an investment, file a complaint with the DFI Securities Division.
Additional Resources
Protecting Yourself from Financial Fraud
Virtual Currency, Cryptocurrency, and Digital Assets Information for Consumers