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After being hit by a barrage of reports from victims of digital asset scams, the California Department of Financial Protection and Innovation (DFPI) moved in to set up fraud trackers to stifle the antics of fraudsters.
The DFPI launched a consumer complaints tracker on January 31, with 15 known scams making the first wave. The tracker contains the name and website of the fraud entity, the narrative of the complaint, and information about the type of fraud used.
“Scammers are in the shadows using the public’s interest in crypto assets to take advantage of California’s most vulnerable,” said DFPI Commissioner Clothilde Hewlett. “Through the new Crypto Scam Tracker, combined with stringent law enforcement efforts, the DFPI is committed to highlighting these vicious predators and protecting consumers and investors.”
Swine slaughter accounts for most of the deceptive tactics used by bad actors, while fraudulent trading platforms take second place, according to the initial list. Other fraud strategies identified by the DFPI include fake scams and liquidity mining scams.
Most of the victims were roped from dating platforms such as Coffee Meets Bagel and other social media platforms such as Whatsapp, Facebook (NASDAQ:META), and Instagram, where scammers pretend to be interested in them before introducing them to bogus investment opportunities. Bait in all 15 entries in the scam tracker is a promise of huge returns on deposits on investment platforms.
Out of 15 known scams, victims suffered nearly $2 million in losses, with one person losing a staggering $500,000 in a fake scam masquerading as CoinWorld.
“As new scams emerge, the DFPI will update this list on an ongoing basis to alert and protect the public,” read the announcement on the agency’s website. Consumers are advised to look for schemes involving impersonation of well-known industrial brands.
The DFPI is working hard against fraudsters
In addition to fraud trackers, the DFPI has spearheaded the fight against digital currency fraudsters. In December 2022, the consumer protection agency flagged 17 websites for promoting fraudulent schemes, following up on its warning of 26 other entities in June.
It also marks an investigation into the operations of BlockFi and Voyager Digital while the California Consumer Federation (CFC) moves forward to sponsor a bill for a new licensing regime for virtual currency companies.
The DFPI urged investors to be wary of digital asset lenders arguing that “the same rules and protections do not govern them as banks and credit unions.
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