- The Californian regulatory body has issued 17 alerts over the past two days against potentially fraudulent crypto brokers and websites.
- As per a CertiK report, 84% of videos on YouTube mentioning front-running bots were scams.
The California Department of Financial Protection and Innovation (DFPI) has issued 17 alerts over the past two days against potentially fraudulent crypto brokers and websites.
Tahoe Digital Exchange, TeleTrade Options, Tony Alin Trading Firm, Hekamenltd/Tosal Markets Limited, Trade 1960, Yong Ying Global Investment Company Limited, Unison FX, VoyanX.com, and ZC Exchange are among the crypto platforms that the Californian regulatory body had warned investors of. Besides, eth-Wintermute.net and UniSwap LLC are the two copycat versions of credible crypto platforms.
According to the DFPI, these companies appear to be committing fraud against California consumers. It is unusual for the DFPI to issue such a large number of warnings.
The number of crypto scam reports appears to have increased in the latter stages of the year. The DFPI usually issues sporadic warnings about company investigations or alerts about specific incidents.
An elaborate crypto scam
The warnings were issued in response to citizen complaints against crypto brokers and traders, with the DFPI stating that complainants have reported losses ranging from $2,000 to $1.2 million in some cases. The DFPI, on the other hand, only goes so far as to say that these websites appear to be engaging in fraud.
The majority of these complaints are related to pig slaughtering or romance scams. In this type of scam, an individual or a group creates a false online identity in order to establish false relationships or friendships through social media, messaging, and dating apps.
A fraudster would typically spend weeks or months building such phoney kinship in order to gain the victim’s trust before gradually shifting the conversation to investments and enticing them to invest in these fraudulent schemes.
The victim ends up investing in cryptocurrency through a duplicate version of a legitimate website or transferring funds to a bogus wallet address. Finally, the scammer disconnects all forms of communication.
The blockchain security firm CertiK reported early this month that 84% of videos on YouTube mentioning front-running bots were scams, with the number increasing 500% from 28 videos in 2021 to 168 videos in 2022.
“The DFPI urges consumers to exercise extreme caution before responding to any solicitation offering investment or financial services. To check whether an investment or financial service provider is licensed in California” mentions the DFPI.