California flags 17 virtual currency websites for alleged fraudulent activities

California’s Department of Financial Protection and Innovation (DFPI) has issued 17 public warnings over the activities of digital asset websites.

The DFPI alleges that the websites are engaged in fraudulent activities targeted primarily toward residents. The financial watchdog released the trove of advisories over two days, a move which bears similarity to a barrage of warnings against 26 virtual currency platforms in June.

According to the latest warnings, several platforms mimic popular legitimate digital asset service providers like Wintermute and Uniswap. Entities that made the DFPI’s warnings include TeleTrade Options, Yong Ying Global Investment Company, Unison FX, ZC Exchange, Tosal Markets Limited, Trade 1960, and Tahoe Digital Exchange, among others.

The warnings resulted from multiple complaints from California’s residents to the DFPI, with losses in the range of $2,000 to over $1 million. The common theme in the complaint was an investment offer in virtual currencies incentivized with the promise of lucrative returns.

Victims are contacted via social media sites like Twitter, Instagram, Whatsapp, or Facebook, and using the “pig butchering” strategy, the bad actors feign a romantic interest to win the trust of their victims. Other strategies employed by the suspects are Advance Fee Fraud, outright phishing, and impersonation.

“The DFPI urges consumers to exercise extreme caution before responding to any solicitation offering investment or financial services,” said the DFPI.

The scourge of digital asset fraudsters

Digital asset fraudsters have been on a wild rampage since the start of the year, costing victims losses running into billions of dollars. Their activities have piqued the interest of law enforcement agencies like the Federal Bureau of Investigation (FBI) and the Department of Justice (DOJ) as they make a valiant attempt to reverse the trend.

According to a warning, the FBI notes that the fraudsters will be more active during the holidays with a target for lonely individuals. Individuals have been warned to keep their guard up, avoiding unsolicited messages from strangers over the internet.

“Scammers tend to focus on the elderly because they know they’re trusting, and they know older Americans usually have more money,” said Frank Fisher, a public affairs specialist at the FBI’s Albuquerque office.

Aside from pig butchering scams, bad actors pull up the sweepstakes scam, which involves contacting individuals and informing them of winning a prize. The victims are fleeced under the guise of paying for processing costs and taxes.

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