A total of 17 questionable crypto websites, which also include crypto brokers, have been flagged by the California Department of Financial Protection and Innovation (DFPI). The website is believed to engage in fraudulent practices.
The warning against 17 crypto websites and brokers was passed within two days after the crypto entities were found to have committed fraud against California consumers. The warning was published on the Consumer Alert page on December 27 and 28.
DFPI states:
DFPI urges consumers to exercise extreme caution before responding to solicitations offering investment or financial services. To check whether the investment or financial services provider is licensed in California
The DFPI finally sent a notice on crypto scams to warn consumers in June 2022. The regulatory body has flagged more than 26 fraudulent crypto websites.
Rundown Includes These Fraudulent Crypto Websites
The warning was issued to Tahoe Digital Exchange, TeleTrade Options, Tony Alin Trading Firm, Hekamen Ltd./Tosal Markets Limited, Trade 1960, Yong Ying Global Investment Company Limited, Unison FX, VoyanX.com, and ZC Exchange, among other websites .
Not only that, but it was discovered that two other websites, eth-Wintermute.net and UniSwap LLC, are impersonating two well-known cryptocurrency websites.
Also, it is not uncommon for the DFPI to issue multiple warnings at one time, this may mean that crypto fraud is on the rise at the end of the year.
Concerned regulatory bodies usually send periodic warnings about investigations to various companies along with concerns related to specific incidents.
What Two Crypto Scams Are Alleged?
As mentioned earlier, the DFPI last issued alerts in large volumes in June this year in response to various complaints from citizens against brokers and websites. It is reported that consumers have lost approximately $2,000 to $1.2 million in fraudulent cases.
Two of the most common scams include the ‘pig slaughter scam’ and the ‘Advance Fee Scheme scam’. In the case of the pig slaughter scam, a person or a group of people creates a mock-up identity and creates the scam in a fake relationship created mainly through social media.
These relationships can range from friendship to business partnerships and even romance. Fraudsters usually invest a lot of time in building these fake relationships and then gradually move on to conversations about investment opportunities, which are usually characterized as ‘too good to be true’.
The motive for carrying out these scams is to ensure that the victim ends up investing in a copycat website from a legitimate website, or by sending funds to a dubious wallet address. Along with the ‘pig slaughter scam’ there is another scam called the ‘Advance Fee Scheme’.
This tactic involves bad actors asking for large sums of money, i.e. fake withdrawals from scam websites.
When the victim decides to act, the fraudsters immediately get the initial investment along with the new transaction and then cut off all contact at that time.
Featured Images From UnSplash, Graphics From TradingView.com