Washington state’s financial regulator has issued a warning about potential cryptocurrency fraud involving mining platforms and wallets. A Washington investor was defrauded of more than $750,000 after investing. Although the investment reportedly grew to $1.4 million, the investor has continued to face tax and fee demands.

Washington Investor Defrauded Out of Over $750,000 in Cryptocurrency Mining Scam

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

The complaint involves a Washington-based investor who met a person named “Frank” online and invested more than $300,000 in a platform called “Halo” to mine the stablecoin tether (USDT). After the investment allegedly grew to $1.4 million, the investor was asked to pay additional taxes and fees to withdraw the money. He added more than $65,000 in “withholding taxes” up front and an additional $50,000 in taxes through a “Bitkeep” wallet, which has changed names several times.

As withdrawal issues continued, Frank charged two ETH to recover the funds, costing investors a total of more than $750,000. DFI detailed:

Investors have liquidated 401(k) retirement accounts, borrowed money from family and maxed out credit cards.

DFI said it has not yet verified these allegations or the legitimacy of the platforms and wallets involved. It warned consumers not to respond to unsolicited financial offers and stressed the importance of checking the licensing status of investment professionals through FINRA Brokercheck or state regulators. Anyone who believes they have been scammed is encouraged to file a complaint with the DFI Securities Division. The regulator emphasized:

Investment professionals must be licensed with the DFI to offer investments to Washington residents. Additionally, most investment products sold must be registered with the DFI.

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