California Regulators Warn of New Crypto Scams, Shuts Fraud Sites

Highlights:

• California financial regulator DFPI got 2,668 complaints last year and spotted seven new crypto scams.
• DFPI shut 26 scam sites, exposing $4.6M in losses and rising pig butchering scams.
• California DOJ also took down 42 scam sites the previous year.

The California Department of Financial Protection and Innovation (DFPI) stated on March 10 that it received 2,668 consumer complaints about crypto and AI-related scams from California and across the U.S. last year. From these complaints, it identified seven new types of fraud, including Bitcoin mining schemes that trick investors with fake mining opportunities. Victims also reported losing private keys through fake airdrops and investment scams in WhatsApp or Telegram. Many lost crypto to AI investment scams promising high returns and fraudulent websites.

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There was also a rise in crimeware-as-a-service (CaaS), where skilled hackers sell their tools to less experienced criminals for money. DFPI Commissioner KC Mohseni warned users to be cautious with unknown platforms, check website domains, and avoid crypto recovery scam sites.

DFPI Shuts Down 26 Fraudulent Crypto Websites and Warns Against Pig Butchering

The DFPI says it shut down over 26 fraudulent crypto websites last year, uncovering $4.6 million in user losses through its partnership with the state’s DOJ and a nationally recognized scam tracker tool. The ‘Crypto Scam Tracker’ tool relies on consumer complaints and details losses from reported transactions.

Today, we’re announcing that through our nationally recognized Crypto Scam Tracker and a new partnership with the California Department of Justice (DOJ), the state has shut down more than 26 different crypto scam websites.

Read our press release: https://t.co/hkhXLymdyR pic.twitter.com/7U30Onll0V

— CA Department of Financial Protection & Innovation (@CaliforniaDFPI) March 10, 2025

The DFPI has also released a ‘Pig Butchering’ scam playbook, highlighting potential loopholes users should watch for. Attorney General Rob Bonta emphasized the need for stronger enforcement.

He stated:

“As scammers grow increasingly sophisticated and calculated, so must our enforcement. Scammers can use deception and emotional manipulation to take advantage of people looking for connection.”

According to a recent Chainalysis report, pig butchering scams generate the highest crypto revenues, growing nearly 40% year over year. An on-chain security report from Cyvers estimated pig butchering scams cost the industry over $5.5 billion last year, with 200,000 cases.

California DOJ Takes Down 42 Fraudulent Crypto Websites

Meanwhile, California’s DOJ shut down 42 crypto scam websites in the previous year, seizing $6.5 million from victims. The average loss per person reached $146,306. In a March 10 statement, the DOJ highlighted the difficulty of prosecuting international fraudsters. The agency said these scam websites promised high returns and lacked contact details. They also offered sign-up prizes and weren’t listed on trusted platforms like CoinMarketCap.

In a recent development, Coinbase security chief Philip Martin wants a simpler system for reporting crypto scams in the U.S. He said the current process is fragmented. Speaking at SXSW in Austin, Texas, he highlighted challenges for victims and authorities. He supports a single platform to improve tracking and resource allocation.

Victims now report scams to different federal and state agencies, like the FBI’s IC3. Martin said many feel unheard, receiving no updates on cases. He proposed a single system to centralize data and improve transparency for victims.

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