The California Department of Financial Protection and Innovation (DFPI) is cautioning consumers about seven new types of cryptocurrency and artificial intelligence (AI) scams that emerged in 2024. The warning comes after the agency received 2,668 complaints, revealing increasingly sophisticated methods used by fraudsters.
These new scams include fake Bitcoin mining schemes that promise fraudulent investment opportunities, and fake crypto gaming setups that encourage users to deposit funds only to have their digital wallets drained. The DFPI also received reports of employment scams where victims are required to transfer cryptocurrency and provide personal information to secure a bogus job.
Other scams involve the theft of private keys via fake airdrops, manipulative investment groups operating on platforms like WhatsApp and Telegram, and AI investment schemes that promise unrealistically high returns. Additionally, some victims reported losing their cryptocurrency after interacting with deceptive websites.
DFPI Commissioner KC Mohseni urged residents to exercise caution when engaging with unfamiliar platforms. “Verify website domains to avoid fraudulent imitations, and stay wary of crypto recovery scam sites,” Mohseni advised.
The AI industry experienced significant growth in 2024, reaching a market capitalization of $638 billion, according to Precedence Research. The rise in crimeware-as-a-service (CaaS), where experienced hackers sell tools and services to less skilled criminals, also poses a threat.
In related news, the California Department of Justice (DOJ) took down 42 fraudulent crypto websites, which stole $6.5 million from victims in 2024, with an average loss per person of $146,306. The DOJ noted that international origins of these scams make prosecution and arrests challenging. Common characteristics of these scam websites included promises of high returns, lack of contact information, offers of prizes for signing up, and absence from legitimate crypto industry websites like CoinMarketCap.
The DFPI, in collaboration with the state, shut down over 26 fraudulent crypto websites and uncovered $4.6 million in user losses last year. On-chain security firm Cyvers reported that pig butchering schemes were prominent in 2024, costing the industry over $5.5 billion across 200,000 identified cases. Meanwhile, blockchain security firm CertiK’s annual Web3 security report identified crypto phishing attacks as the most significant security threat, with losses totaling $1 billion across 296 incidents.
