Beware of Cryptocurrency Scams: California Issues Warning

The California Attorney General’s office has issued a significant alert regarding the rise of fraudulent cryptocurrency schemes, commonly known as “pig butchering” scams. These schemes typically involve scammers reaching out to victims through unsolicited messages on social media or text, sweeping them into a web of deception that leads to fake investment opportunities.

Understanding Pig Butchering Scams

In a typical scenario, victims are approached in a friendly manner, fostering a false sense of rapport before being directed to impersonated cryptocurrency platforms that promise enormous financial returns. Attorney General Rob Bonta emphasized the need for heightened vigilance, noting, “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.”

Recent Actions by California’s Department of Justice

The California Department of Justice (DOJ) has been proactive in combating these scams. In 2024 alone, the DOJ successfully shut down 42 fraudulent websites that misled investors, resulting in over $6.5 million in losses, with victims averaging a staggering loss of $146,306 each.

Top Red Flags to Watch For

To help protect consumers, the DOJ has outlined ten critical warning signs that may indicate a fraudulent cryptocurrency scheme:

• Impossible Rates of Return: Look out for promises of extraordinarily high returns on investments.
• No Contact Information: Legitimate sites typically provide clear contact details like phone numbers and addresses.
• Stolen Images: Scammers often use stolen pictures of individuals they claim work for them or are satisfied customers.
• Copy-Pasted Content: Many fake websites mimic legitimate ones by stealing their text and layout.
• Fake Addresses: If a website lists an address, verify it as it may belong to a different business or be entirely fictitious.
• Generous Offers: Be cautious of sites offering substantial prizes or bonuses for investments.
• Inconsistent Information: Mismatched contact details may indicate a scam; for example, an out-of-state phone number listed with a local address.
• Stale Websites: Scams often feature outdated content that isn’t refreshed regularly.
• Poor Grammar: Many fraudulent sites exhibit poor language skills, indicating a lack of authenticity.
• Lack of Industry Recognition: Legitimate cryptocurrency exchanges are typically recognized by established industry resources.

Staying Informed and Reporting Scams

Commissioner KC Mohseni of the Department of Financial Protection and Innovation urges Californians to remain vigilant and verify unknown platforms before engaging with them. Additionally, he encourages reporting any suspicious activities to help strengthen the state’s Crypto Scam Tracker. “Staying informed and reporting scams to the DFPI strengthens the Crypto Scam Tracker, making it an even more effective tool in protecting consumers,” he noted.

What to Do If You’re a Victim

If you suspect you have fallen victim to such a scam, it is crucial to cease all communication with the scammer immediately and contact local law enforcement. Reports can be filed through various channels, including:

• California Department of Justice
• Department of Financial Protection and Innovation
• FBI’s Internet Crime Complaint Center (IC3)

By staying informed and aware of potential scams, consumers can better protect their financial interests and contribute to the fight against cyber fraud.