Wealthy California is in high alert on Crypto scam

Crypto scam news:

In 2023, California saw 9,500 complaints about fraud, double the number reported in Florida or Texas

California had the most billionaires in the nation, and the San Jose-Sunnyvale-Santa Clara region boasted the highest number of millionaire households out of all U.S. metropolitan areas as of 2020. This wealth has attracted not only legitimate investment opportunities but also scammers. The FBI recently reported that California lost a staggering $1.1 billion to cryptocurrency scams in the past year, more than any other state. These scams prey on people's fear of missing out on the cryptocurrency craze, luring them into transferring money to fraudulent websites with the promise of high returns.

The FBI report highlighted the tactics used by scammers, who often pose as investment managers or romantic interests, and sometimes even impersonate celebrities. In 2023, California saw 9,500 complaints about fraud, double the number reported in Florida or Texas. The reasons behind the prevalence of these scams in California remain unclear, but factors may include the high number of crypto investors, the state's proximity to tech hubs, and residents' awareness of how to report fraud.

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The California Department of Financial Protection & Innovation (DFPI) is actively monitoring and responding to complaints about these scams. The department's spokesperson, Mark Leyes, noted that the issue has grown in recent years, with more than 200 complaints about crypto fraud filed on the DFPI's website. These scams often involve elaborate schemes, such as "pig butchering," where scammers build trust with victims over social media or dating apps before convincing them to invest in fake opportunities.

One notable case involved a woman who lost nearly a million dollars after being deceived by a scammer posing as "Enze Zhao," who claimed to be an economics major. Zhao convinced her to invest $500,000 into a trading platform under the guise of building a future together. After being persuaded to invest even more money, Zhao disappeared along with her funds. Many other victims have reported similar losses, with some individuals losing millions of dollars.

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The FBI warns that investment scammers share a common trait: they will establish a relationship through calls and emails but will never meet in person. This makes it crucial to be wary of advice from distant "friends" you have never met. As cryptocurrency becomes more popular, criminals are using increasingly sophisticated tactics to deceive people. The FBI urges consumers to stay vigilant and report any suspected fraud to the Internet Crime Complaint Center at ic3.gov.