DFI has received a complaint from a Washington resident about Avatrade and its website avatradg.buzz (“Avatrade” or “avatradg.buzz”), which purports to be a platform for buying and selling cryptocurrency.
The complainant alleged, but the Securities Division has not verified, that more than six Washington residents have lost more than $5 million by using Avatrade’s purported platform.
Avatradg.buzz should not be confused with Avatrade.com, which also purports to be a platform for trading cryptocurrency. However, Avatrade.com, an Ireland-based business, has stated that it does not conduct business in the United States.
The complainant alleged that a man whom she had met on a dating website who called himself Malko Pedro (“Pedro”) encouraged her to move cryptocurrency that she had recently purchased to Avatrade at avatradg.buzz. Pedro stated that Avatrade’s proprietary technology would produce dramatic increases in the value of the complainant’s cryptocurrency.
The complainant transferred her recently purchased cryptocurrency to Avatrade after viewing what she believed to be a legitimate cryptocurrency trading platform at avatradg.buzz.
When the complainant logged on to avatradg.buzz to check the value of the cryptocurrency that she had transferred, Avatrade had changed its URL to avatje.com. At some point thereafter, Avatrade changed its URL again, as the complainant was redirected to hiflyk63747.xyz/#/ when she later tried to access her account.
Avatrade represented that the value of the complainant’s cryptocurrency had increased by over four hundred percent. Shortly thereafter, the complainant tried to withdraw her funds. Avatrade then told the complainant that she owed over $186,000 in taxes to the federal government based on her cryptocurrency activity.
Avatrade also stated that Pedro had paid a portion of those taxes. Avatrade told the complainant that payment of taxes by someone other than the account holder forced Avatrade to consider the account to be fraudulent. Avatrade told the complainant that, as the holder of a fraudulent account, she had to pay an additional five percent penalty before Avatrade would release her funds.
The complainant has not paid these items, and Avatrade has not released the profits that it represents that she has earned, nor her initial investment funds of approximately $40,000. These allegations have not been verified by DFI.
The complaint included several characteristics of what are commonly referred to as advance fee schemes.
Several aspects of the complaint also suggest that fraud has occurred, including:
- Exploitation of an intimate relationship
- The use of a likely fictitious name (Malko Pedro)
- Constant changes to a website’s url
- The use of a complex url that does not include the business’s name
How to protect yourself
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 Securities Division of the Washington State Department of Financial Institutions at (360) 902-8760. Residents of other states should contact their state securities regulator.
If consumers believe that 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.