The crypto industry has more than its fair share of scammers and illicit players. According to a Privacy Affairs study, investors lost $3.5 billion to scammers in 2022. Nonetheless, government bodies and agencies are taking measures to curb such activity. However, in the crypto space, this can be harder than in tradfi (traditional finance).
The California DFPI (Department of Financial Protection and Innovation) has issued warnings to 17 crypto brokers and websites it believes to be fraudulent. Tahoe Digital Exchange, TeleTrade Options, Tony Alin Trading Firm, and Hekamenltd/Tosal Markets Limited are just a handful of the companies on the list. Additionally, eth-Wintermute.net and UniSwap LLC are two websites impersonating two well-known names in the cryptocurrency industry.
The DFPI is responsible for administering the state’s lending and banking laws.
An increase in crypto scams in the last days of 2022?
The number of complaints of cryptocurrency scams may have increased in the last months of the year. The last time the DFPI issued a significant number of crypto scam alerts was in June when it raised the red flag over 26 suspect sites.
The recent warnings were issued in response to public complaints about the brokers and websites. According to the DFPI, the complainants claimed to have lost capital from $2,000 to as much as $1.2 million in certain instances. However, the DFPI only states that these websites appear to be engaged in fraud.
Most of these alerts claim that a common theme pertains to pig-slaughtering scams. This scam entails someone or a group creating a false internet persona. The ultimate objective is to convince the victim to use a fraudulent website to make a cryptocurrency investment.
In addition to pig slaughtering, the alleged con artists are also accused of using an additional scheme known as the “Advance Fee Scheme.” Here, the con artists will demand substantial sums of money to handle the phony withdrawals from their swindling websites.