State Regulator Warns of Crypto Fraud After Investor Loses $750K

The Washington State financial regulator has issued a warning about potential cryptocurrency fraud involving a mining platform and wallet. A Washington investor was scammed out of over $750,000 after investing. Despite the investment supposedly growing to $1.4 million, the investor faced continuous demands for taxes and fees.

Washington Investor Scammed Over $750,000 in Crypto Mining Fraud

The Washington State Department of Financial Institutions (DFI) announced on Monday that it has received a complaint regarding a possible fraudulent cryptocurrency mining platform and wallet. The DFI has warned consumers to be cautious and investigate any financial solicitations.

The complaint involves a Washington investor who met someone named “Frank” online and invested over $300,000 into a platform called “Halo” to mine stablecoin tether (USDT). After the investment supposedly grew to $1.4 million, the investor was asked to pay additional taxes and fees to withdraw funds. He added over $65,000 upfront for “withheld taxes” and another $50,000 in taxes through a “Bitkeep” wallet, which changed names multiple times.

When withdrawal issues persisted, Frank charged two ETH for fund recovery, leading to the investor losing over $750,000 in total. The DFI detailed:

The investor liquidated his 401(k) retirement account, borrowed from family, and maxed out his credit cards.

The DFI stated it has not yet verified these allegations or the legitimacy of the platforms and wallets involved. They caution consumers against responding to unsolicited financial offers and stress the importance of checking the licensing status of investment professionals through FINRA Brokercheck or state regulators. Filing a complaint with DFI Securities Division is encouraged for those who believe they’ve been scammed. The regulator stressed:

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.

What do you think about this crypto investment scam? Let us know in the comments section below.

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