Quick Facts
- The California Department of Financial Protection and Innovation (DFPI) issued a warning about 7 new types of crypto and AI scams.
- In 2024, the DFPI received 2,668 complaints.
- The scams included fake Bitcoin mining schemes, fake crypto gaming schemes, AI investment scams, and crimeware-as-a-service.
- The California Department of Justice (DOJ) shut down 42 crypto scam websites that stole $6.5 million from victims.
California Warns of 7 New Types of Crypto and AI Scams: What You Need to Know
As the cryptocurrency and AI industries continue to grow rapidly, so do the number of scammers and fraudsters seeking to take advantage of unsuspecting victims. Recently, the California Department of Financial Protection and Innovation (DFPI) issued a warning about 7 new types of crypto and AI scams that it hadn’t seen before, highlighting the need for caution and awareness among consumers.
The Warning
In a statement released on March 10, the DFPI revealed that it received 2,668 complaints in 2024, with 7 new types of scams that it hadn’t seen before. The regulator urged consumers to be vigilant when interacting with unknown platforms, verifying website domains to avoid fraudulent imitations and staying wary of crypto recovery scam sites.
Fake Bitcoin Mining Schemes
One of the scams warned about is fake Bitcoin mining schemes, where fraudsters offer fake investments in mining. These schemes promise unusually high returns and may even offer fake mining equipment or software to unsuspecting victims. However, the reality is that the money is often used to fund the scammers’ own cryptocurrency investments.
Fake Crypto Gaming Schemes
Another type of scam warned about is fake crypto gaming schemes. These schemes promise victims that they will win large sums of cryptocurrency by playing games or taking part in online activities. However, what victims often get is a drain on their cryptocurrency wallets and no returns on their investments.
AI Investment Scams
The AI industry has seen significant growth in 2024, reaching a market cap of $638 billion. However, this growth has also led to an increase in AI-powered scams, where fraudsters use machine learning algorithms to create fake investment opportunities that promise unusually high returns. These scams often target unsuspecting victims who are looking to invest in emerging technologies.
Crimeware-as-a-Service
Additionally, there has been a notable rise in crimeware-as-a-service (CaaS), where experienced hackers and cybercriminals sell their tools and services to less experienced offenders for a price. This has led to a proliferation of crypto-specific malware and other types of cyber threats.
DoJ Shutters 42 Crypto Scam Websites
The California Department of Justice (DOJ) has taken down 42 crypto scam websites that stole $6.5 million from victims, with an average loss per person of $146,306. The scams targeted unsuspecting victims who were lured in by promises of high returns and no contact information.
Stay Safe
To avoid falling victim to these scams, it’s essential to stay vigilant and do your research before investing in any cryptocurrency or AI-related opportunity. Here are some tips to help you stay safe:
- Verify the website domain and look for red flags such as typos or poor grammar.
- Be wary of unsolicited investment opportunities that promise unusually high returns.
- Research the company and its founders to see if they have a track record of success.
- Don’t invest more than you can afford to lose.
- Use strong passwords and enable two-factor authentication on your cryptocurrency wallets.
