The fight against cryptocurrency fraud in the U.S. has made significant progress as California has shut down 26 crypto scam websites, with total losses amounting to $4.6 million in 2024. This move highlights the strong increase in fraudulent schemes, particularly sophisticated tricks targeting cryptocurrency investors.


Crypto Scams Are Becoming More Dangerous


According to a statement from the California Department of Financial Protection and Innovation (#DFPI ), this agency has received more than 2,600 complaints from victims of scam websites. Common tactics include:

✅ Fake Bitcoin mining scams – promising high returns but with no actual mining activity.

✅ Crypto recruitment scams – luring victims into crypto-related jobs that are actually multi-level schemes or asset theft.

✅ Crypto game scams – promoting blockchain games that are essentially designed to steal money from players.

✅ AI investment scams – impersonating AI investment funds to entice victims to deposit money into non-existent projects.


DFPI has developed the Crypto Scam Tracker tool to help the public identify these new forms of fraud. KC Mohseni, DFPI Commissioner, states that this tool plays an important role in raising awareness and protecting investors.


U.S. Department of Justice (DOJ) Also Gets Involved


Not only the DFPI, but the California Department of Justice (DOJ) has also aggressively tackled 42 international scam websites, revealing $6.5 million in losses from promises of super high returns.


The DOJ report shows a strong increase in "pig-butchering" scams – a sophisticated form of fraud via social media and dating apps.


🔴 How Does "Pig-Butchering" Work?

1️⃣ Scammers approach victims via social media, online dating, or random messaging.

2️⃣ Gradually build trust, pretending to be a successful investor and sharing attractive investment opportunities.

3️⃣ Convince victims to deposit money into fake investment platforms, initially allowing withdrawals to create a sense of security.

4️⃣ Once victims invest a large amount, the website disappears or blocks withdrawals, leaving them with nothing.


Rob Bonta, Attorney General, warns that criminals are exploiting victims' loneliness and emotions to manipulate finances.


Crypto Scams Surge with Artificial Intelligence (AI)


According to Chainalysis, 2024 has seen a 40% increase in revenue from "pig-butchering" scams and a 210% increase in victim deposits compared to the previous year.


Total losses from crypto scams have reached $9.9 billion this year, with AI playing a significant role.


Elad Fouks, a fraud expert at Chainalysis, said that AI is being exploited by criminals to create fake content more professionally, including:

📌 Fake investment websites with professional design, identical to reputable exchanges.

📌 Fake PR articles on news sites to create credibility.

📌 Fake crypto project listings, misleading victims into believing they are legitimate investments.


Summary


🔹 California has shut down 26 crypto scam websites, exposing $4.6 million in damages.

🔹 DOJ has dismantled 42 other scams, with total losses reaching $6.5 million.

🔹 The "pig-butchering" scam phenomenon is booming, targeting social media and dating app users.

🔹 AI technology is making crypto scams increasingly sophisticated and harder to detect.


This event serves as a strong warning for crypto investors. Always be wary of investment opportunities that are "too good to be true" and thoroughly check before investing in any platform! 🚨