California shuts down 26 crypto fraud sites tied to a loss of $4.6 million

California authorities have bolstered their fight against crypto fraud, defeated 26 fraudulent crypto websites, revealing more than $4.6 million in consumer losses in 2024.

In a statement Monday, the California Department of Financial Protection and Innovation (DFPI) said it had identified seven new types of fraud with the help of “crypto fraud trackers.”

The tracker has handled over 2,600 complaints and exposed fake Bitcoin mining, crypto fraud, cryptogame fraud, and misleading AI investment schemes.

“As Crypto Scams evolves, DFPI’s Crypto Scam Tracker will allow consumers to stay vigilant,” DFPI Commissioner KC Mohseni said in a statement.

In another report, the California Department of Justice, or DOJ, said it had defeated 42 fraudulent websites run by international fraudsters, revealing a loss of $6.5 million from high returns promises.

The rise of “pig butter” fraud has driven a surge in fraud, and the DOJ report points out a nasty increase in these schemes.

In the Pig Attack Plan, scammers build false relationships with victims via social media and dating apps, but later manipulate them into investing in non-existent cryptocurrency projects.

When the victims try to withdraw their funds, they are left empty-handed.

“Cheaters can use deceptions and emotional manipulation to take advantage of those looking for connection,” said California Attorney General Rob Bonta.

Blockchain analytics firm Chain Melt reported last month that pig slaughter fraud revenues have increased by about 40% compared to 2023, and victim sediment has increased by nearly 210%.

This form of fraud alone accounts for the majority of $9.9 billion in fraud-related cryptocurrency losses tracked by chain analysis in 2024.

In the report, Elad Fouks, head of Chain Orisis’ fraud products, said that generating AI could be used to amplify and expand Crypto fraud and crime.

According to Fouks, Genai generates realistic fake content, such as “websites and listings,” which are used to power investment scams and fraud, and calls these attacks “more convincing and difficult to detect.”

Edited by Stacy Elliott.