The Washington State Department of Financial Institutions (DFI), Securities Division received a complaint concerning a Washington resident who invested through t-otc.com (T-OTC), a website claiming to be a trading platform for crypto currency investments. T-OTC also claims to be affiliated with the Toronto Stock Exchange and the TMX Group and regulated by the U.S. Treasury Financial Crimes Enforcement Bureau [sic] (Network), or FinCEN. The website is no longer active.
The investor met a stranger named “Willis” through a social media dating app. Willis and the investor communicated for several weeks via WhatsApp before Willis suggested that the investor use the T-OTC app to trade Bitcoin. Willis offered to help the investor with the trading using the T-OTC app so that they could meet and go on vacation together. Willis sent the investor a link to download the T-OTC app and then instructed the investor to establish an account with T-OTC. Willis then told the investor to transfer U.S. dollars to another crypto currency platform, which the investor had difficulty doing. Willis then instructed the investor to download Cash App to buy Bitcoin and transfer it to the investor’s purported T-OTC account.
The investor started with a $100 investment when Willis said that there was a “good trend.” Willis instructed the investor to open the T-OTC app and when to press “green to buy up” and when to press “blue to buy down.” Based on Willis’ instructions, the investor believed he had realized a $179 gain on his $100 investment in Bitcoin, so he transferred more Bitcoin via Cash App to his purported T-OTC account. Over the next several weeks, Willis randomly reached out to the investor representing that it was a “good time today” and instructed the investor when to buy and when to sell Bitcoin using the T-OTC app.
The investor was able to make a $100 withdrawal from his purported T-OTC account. When the investor tried to withdraw $150 approximately two weeks later, the transaction was rejected. The investor made three attempts to withdraw funds from his T-OTC account, requesting lesser amounts each time, but all were rejected. Then, T-OTC informed the investor that he had to pay a $4,213 fee to withdraw any of his purported investment gains. The investor paid the fee. When the investor attempted to make a withdrawal after paying the fee, T-OTC informed the investor that the Financial Industry Regulatory Authority (FINRA), a purported government entity, had seized all of the investor’s funds except $2,050. The investor contacted FINRA and learned that FINRA did not seize, or freeze, the investor’s funds. After the investor informed T-OTC about his contact with FINRA, all communications ceased. The investor estimates his total losses at approximately $31,050. These allegations have not been verified by DFI.
This appears to be what is commonly called “Advance Fee Fraud”, which can take many forms . It also appears to be what is commonly called a Pig Butchering Scheme.
FINRA is a self-regulatory organization that regulates the broker-dealer industry. It is not a government entity and does not seize investor funds.
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.
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
Virtual Currency, Cryptocurrency, and Digital Assets Information for Consumers