Nikolas Sargeant
California financial regulators have successfully shut down 26 cryptocurrency scam websites using their nationally-recognized tracking tool, marking a significant victory in the state's ongoing battle against digital financial fraud.
The California Department of Financial Protection and Innovation (DFPI) has strengthened its partnership with the state's Department of Justice (DOJ) to combat the rising tide of cryptocurrency-related fraud. This collaborative effort has uncovered a troubling $4.6 million in consumer losses connected to these sophisticated scams.
The scale of the problem is staggering—according to FBI data, California residents lost approximately $1.2 billion to cryptocurrency scams in 2023 alone. This alarming figure highlights the urgent need for regulatory intervention in this rapidly evolving space.
Last year, the DFPI received 2,668 complaints from California residents, which led to the identification of seven previously unknown fraud schemes targeting cryptocurrency investors.
California Identifies Seven Emerging Crypto Fraud Schemes
The state's Crypto Scam Tracker tool continues to evolve with the addition of newly discovered fraudulent schemes targeting consumers and investors. A notable improvement to the tool is the new screenshot feature, which displays actual interactions with scammers, helping users recognize warning signs.
Among the most prevalent schemes are Bitcoin mining fraud operations, which lure investors with false promises of shared rewards for minimal effort. Crypto gaming scams have also gained popularity, promoting deceptive "play-and-earn" models that encourage users to deposit funds with no legitimate return mechanism.
Other common tactics include fake job offers, counterfeit airdrops and giveaways, wallet drainer attacks, and elaborate group investment frauds—all designed to separate investors from their digital assets.
DFPI Publishes Comprehensive "Pig Butchering" Scam Guide
The DFPI has also released a detailed "Pig Butchering" scam playbook, explaining the potential warning signs that users should recognize to protect themselves.
"As scammers grow increasingly sophisticated and calculated, so must our enforcement," said Attorney General Rob Bonta. "Scammers can use deception and emotional manipulation to take advantage of people looking for connection."
KC Mohseni, DFPI Commissioner, emphasized the importance of the tracking tool in empowering consumers to remain vigilant as crypto scams continue to evolve. He specifically warned residents about unknown platforms and fraudulent crypto recovery services.
"It is a vital part of our enforcement strategy and role as a financial regulator, educator, and enforcement agency," Mohseni stated. "Staying informed and reporting scams to the DFPI strengthens the Crypto Scam Tracker, making it an even more effective tool in protecting consumers."
According to a recent Chainalysis report, "pig butchering" fraud schemes have generated the highest cryptocurrency revenues among scam types, with an alarming 40% year-over-year increase.
