The Washington State Department of Financial Institutions (DFI), Securities Division received a complaint regarding Vihus (also appeared as “VIH-EX”) at www.vihus.com, an alleged cryptocurrency trading center.
Advance Fee Fraud
The investor was initially lured to participate in day trading in the traditional stock market pursuant to the investment advice of someone impersonating a real investment adviser on Facebook. The stock trading brought some profits to the investor but eventually resulted in a loss following the crash in price of a recommended stock.
The investor was then reached by a “Maria” on WhatsApp, who claimed to be with an investment company. Maria offered the opportunity to trade the OBOR token and URE token on the trading platform, Vihus (https://www.vihus.com/h5/#/), with the help of Karl Koppel, who claimed to be an expert cryptocurrency trader partnered with Maria. Maria told the investor that they could recover the loss within several trades based on a 150% return if the investor added an additional investment equivalent to 10% of the loss into their account. The investor deposited around $1,000 cryptocurrency initially and $2,500 subsequently to two digital wallet addresses:
3FLsKHvymw8GPupruFdSkbmWKVHvTCg9cU (BTC) and 0xbe768872908233d5F413C7781FefcCA838299814 (USDT).
When the investor’s account balance was unexpectedly wiped out during the trades, Maria urged the investor to enhance the account’s ability to withstand market fluctuations by infusing more capital into the account. In order to continue the trades, the investor put $10,000 into the Vihus account, of which $5,000 was a loan from Maria. Later, a crash occurred again, and Maria introduced another “compensation plan,” asking the investor to put an additional investment equivalent to 20% of the loss, which the investor refused. The investor eventually learned from a Reddit post that the scheme was a scam.
This appears to be what is commonly called "Advance Fee Fraud", which can take many forms. This also appears to be what is commonly called a "Pig Butchering" scam.
Refund and Recovery Scam
A purported law firm subsequently approached the investor on WhatsApp. The firm solicited the victims of the “pump and dump” scam, where fraudsters manipulate the stock price by spreading misleading information on social media, to join a class action against a public company related to this scheme.
This appears to be a Refund and Recovery Scam, in which the scammers target people who have already lost their money and claim that they can recover the victim’s lost investment, often for an upfront fee.
Investigation of the scheme revealed that the scammers used profile pictures of other professionals on LinkedIn and investment companies’ websites. These allegations have not been verified by DFI.
Check Licensing Status
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.
Conduct Your Own Due Diligence Search
Consumers may also verify a professional’s identity by means other than communications through social medias, such as Facebook or WhatsApp. For example, a consumer can contact the professional’s organization using an official phone number or email associated with that organization.
File A Complaint
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 formal complaint with the Securities Division.
Additional Resources
Virtual Currency, Cryptocurrency, and Digital Assets Information for Consumers
What You Can Do to Avoid Investment Fraud