The California Department of Financial Protection and Innovation (DFPI) has identified seven new types of cryptocurrency and artificial intelligence (AI) scams, following thousands of consumer complaints in 2024. According to a statement on March 10, the agency received 2,668 reports detailing novel fraud tactics not previously documented in its records.
Among the newly identified schemes are fake Bitcoin mining investments, where scammers solicit funds for non-existent mining operations, and fraudulent crypto gaming projects, designed to lure players into depositing assets before draining their wallets. Crypto job scams have also increased, with fraudsters impersonating recruiters and requiring victims to send crypto or disclose sensitive financial details.
Additionally, the DFPI warned against fake airdrop schemes that trick users into sharing their private keys and investment group scams proliferating on WhatsApp and Telegram, where con artists pose as financial advisors to steal funds.
AI investment scams, promising unrealistic high returns through supposed proprietary trading algorithms, were also flagged. Lastly, victims have reported losing digital assets after interacting with malicious websites designed to exploit their wallet credentials.
As fraudulent schemes evolve, regulators stress the importance of consumer vigilance, urging users to verify platforms before making transactions and to remain wary of investment opportunities promising guaranteed high returns.
“As crypto scams evolve, DFPI’s Crypto Scam Tracker helps empower consumers to stay vigilant,” said DFPI Commissioner KC Mohseni.
“It is a vital part of our enforcement strategy and role as a financial regulator, educator and enforcement agency. We urge all Californians to exercise caution with unknown platforms, verify website domains to avoid fraudulent imitations, and stay wary of crypto recovery scam sites.”
The rise of crimeware-as-a-service (CaaS) has fueled a new wave of cryptocurrency scams, as experienced cybercriminals increasingly sell hacking tools to less sophisticated offenders.
This trend has also contributed to a surge in fraudulent schemes. Through its collaboration with state authorities, the DFPI reported shutting down more than 26 fraudulent crypto websites, exposing $4.6 million in consumer losses last year in this domain.
California DOJ Reports Rising Fraud Cases
The California Department of Justice (DOJ) has shut down 42 fraudulent crypto websites in 2024, exposing a network of scams that collectively stole $6.5 million from victims, with an average loss of $146,306 per person.
According to a statement released on 10 March, the DOJ noted that many of these scams were orchestrated by international fraudsters, making prosecution and arrests difficult. Common patterns among the fraudulent websites included promises of guaranteed high returns, fake prize incentives for new users, a lack of legitimate contact information, and missing listings on reputable platforms like CoinMarketCap.
The scale of crypto-related fraud continues to grow, with pig butchering scams—a form of long-term investment fraud—costing the industry an estimated $5.5 billion across 200,000 reported cases in 2024, according to blockchain security firm Cyvers. Meanwhile, CertiK’s annual Web3 security report flagged crypto phishing attacks as the most significant security threat of the year, with $1 billion lost across nearly 300 incidents.
Quick Facts:
- The DFPI received 2,668 complaints in 2024, identifying seven new scam types.
- Collaborative efforts shut down over 26 fraudulent crypto websites, revealing $4.6 million in consumer losses.
- The California DOJ dismantled 42 crypto scam websites, resulting in $6.5 million in losses, with an average loss of $146,306 per victim.
- The AI industry’s market cap surged to $638 billion in 2024, coinciding with an increase in related scams.
