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The California Department of Financial Protection and Innovation (DFPI) said in a March 10 statement that it had received 2,668 complaints so far in 2024. Among them, the regulator identified seven new types of cryptocurrency and AI-related scams not previously on its radar.
According to the DFPI, these schemes include fraudulent Bitcoin (BTC) mining operations where scammers lure victims into fake mining investment opportunities. There were also reports of deceptive crypto gaming platforms, where users are enticed to deposit funds but later find their wallets emptied.
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Other complaints described fraudulent job offers requiring applicants to transfer cryptocurrency and disclose sensitive personal information. Victims also fell prey to phishing schemes involving fake airdrops that resulted in the theft of their private keys. Additionally, scams have emerged involving counterfeit investment groups on WhatsApp and Telegram, and AI-driven investment frauds promising abnormally high returns, only to result in users losing their funds after engaging with fraudulent websites.
The AI sector itself saw significant expansion in 2024, reaching a market valuation of $638 billion, according to Precedence Research. However, with that growth came an increase in cyber threats, including a surge in crimeware-as-a-service (CaaS). This model enables experienced hackers to sell malicious software and services to less skilled criminals.
DFPI Commissioner KC Mohseni advised consumers to exercise caution when dealing with unfamiliar platforms. He urged users to "verify website URLs to prevent fake imitations and to be wary of cryptocurrency recovery scam websites."
Working alongside state agencies, the DFPI reported that it successfully shut down over 26 fraudulent crypto websites last year, helping uncover $4.6 million in consumer losses.
California DOJ Takes Action Against 42 Fraudulent Crypto Sites
Separately, California's Department of Justice (DOJ) announced the takedown of 42 crypto scam websites in 2024. These sites collectively stole $6.5 million from victims, with the average loss per person totaling $146,306.
In its March 10 statement, the DOJ highlighted the difficulty in prosecuting these scams, noting that many are perpetrated by international fraud rings. Common features of these fraudulent sites included guarantees of high returns, lack of contact information, signup bonuses or prizes, and their absence from credible crypto platforms like CoinMarketCap.