California Shuts 26 Crypto Scam Websites, Reveals $4.6M Losses

The California Department of Financial Protection and Innovation (DFPI) has taken decisive action against cryptocurrency fraud by shutting down 26 different scam websites. This move, announced on Monday, has revealed $4.6 million in consumer losses, underscoring the severity of the issue. The crackdown is part of a larger effort to combat the rising number of crypto-related frauds in the state. The DFPI employed its "Crypto Scam Tracker" to identify these fraudulent schemes based on consumer complaints, demonstrating the department's proactive stance on financial regulation and consumer protection.

DFPI Commissioner KC Mohseni highlighted the significance of the Crypto Scam Tracker in empowering consumers to remain vigilant against the evolving landscape of crypto scams. Mohseni advised Californians to be cautious with unknown platforms, verify website domains to avoid fraudulent imitations, and be wary of crypto recovery scam sites. The commissioner also emphasized the importance of staying informed and reporting scams to the DFPI, which enhances the effectiveness of the Crypto Scam Tracker in protecting consumers.

The investigation involved processing over 2,600 complaints, uncovering a variety of scams. These included fake Bitcoin mining operations, deceptive crypto gaming platforms, and fraudulent job offers. The investigation also identified seven new scam types, illustrating the adaptability and sophistication of hackers' tactics. This discovery underscores the need for continuous vigilance and adaptation in the fight against crypto fraud.

Attorney General Rob Bonta praised the efforts of his team and the collaboration with the DFPI in shutting down these fake cryptocurrency websites. Bonta warned Californians about the increasing sophistication and calculated nature of scammers, who use deception and emotional manipulation to exploit individuals seeking connections. He urged residents to be vigilant and protect their finances by avoiding sending money to unknown individuals.

Investigators also noted the prevalence of "pig-butchering" scams, where fraudsters manipulate victims into investing in non-existent cryptocurrency projects. These schemes have significantly contributed to the global crypto scam losses reported in 2024. The DFPI's actions serve as a stark reminder of the ongoing threat posed by crypto fraud and the importance of regulatory efforts in safeguarding consumer interests.