- California’s financial watchdog uncovered seven crypto and AI scams after 2,668 complaints, exposing fraud tactics that stole millions in 2024.
- AI-driven scams surged alongside the industry’s $638 billion growth, with criminals exploiting digital finance platforms.
- Authorities, including Attorney General Rob Bonta and DFPI Commissioner KC Mohseni, intensified crackdowns, shutting down 68 fraudulent crypto websites.
A California financial watchdog has uncovered seven previously unreported crypto and AI-related scams after receiving thousands of complaints in 2024. Fraudsters have been luring victims into elaborate schemes, resulting in millions in stolen funds.
The California Department of Financial Protection and Innovation (DFPI) reported 2,668 complaints this year, exposing deceptive tactics such as fake Bitcoin mining investments and fraudulent crypto gaming platforms. Victims have also fallen prey to fake job offers requiring cryptocurrency transfers and personal data disclosure.
Some reported losing their private keys through deceptive airdrops, while others were tricked into joining sham investment groups on WhatsApp and Telegram. AI-driven investment scams promising impossibly high returns also emerged, leaving users with drained wallets after interacting with fraudulent websites.
AI Boom Fuels Cybercrime Wave
The surge in AI-related scams coincides with the industry’s explosive growth, which saw its market value soar to $638 billion in 2024, according to Precedence Research. However, this expansion has also fueled a rise in crimeware-as-a-service (CaaS), where seasoned cybercriminals sell hacking tools to amateurs.
California Attorney General Rob Bonta warned, “As scammers grow increasingly sophisticated and calculated, so must our enforcement.” DFPI Commissioner KC Mohseni also urged users to verify domains carefully and stay alert to crypto recovery scams masquerading as legitimate services.
Authorities have ramped up efforts to combat these threats, shutting down 26 fraudulent crypto websites in collaboration with the state. Despite these efforts, scammers continue to adapt, exploiting the growing interest in digital assets and AI-based financial platforms.
Millions Lost in Crypto Scams Across California
California’s Department of Justice (DOJ), in partnership with DFPI, took down 42 fraudulent crypto websites in 2024, collectively defrauding victims of $6.5 million. The average loss per victim reached a staggering $146,306, highlighting the scale of the problem.
A March 10 statement from the DOJ acknowledged that international fraudsters orchestrate many of these scams, making prosecution and arrests challenging. The agency noted that common red flags included exaggerated investment returns, a lack of contact information, sign-up prizes, and missing listings on reputable industry websites like CoinMarketCap.
Meanwhile, an on-chain security firm, Cyvers, identified pig butchering schemes as one of the costliest scams of 2024, estimating losses of over $5.5 billion across 200,000 cases. Blockchain security firm CertiK also flagged phishing attacks as the year’s biggest security threat, with 296 incidents causing $1 billion in losses.
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