California Regulator Warns of 17 Crypto Websites Suspected of Fraud

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The California Department of Financial Protection and Innovation (DFPI) issued 17 separate warnings over two days against crypto brokers and websites it suspects are fraudulent.

The list includes 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, to name a few. .

Additionally, there are two copycat sites impersonating two big names in the crypto industry with eth-Wintermute.net and UniSwap LLC.

As of this writing, the DFPI’s consumer alert page issued 17 warnings on December 27 and 28 that these companies appear to be engaging in fraud against California consumers.

It is not common for the DFPI to issue so many alerts at one time, suggesting that the number of crypto scam reports may have increased in the later stages of the year. The DFPI usually issues sporadic warnings about company investigations or alerts about certain incidents.

The last time the DFPI sent such a large number of crypto scam alerts was on June 15, when it sounded the alarm on 26 dodgy crypto platforms.

The warnings came in response to citizen complaints against brokers and websites, with the DFPI saying individuals said they had lost between $2,000 and up to $1.2 million in some cases. The DFPI, however, goes so far as to say that these sites “appear to engage in fraud”.

A key theme alleged in most of these warnings relates to hog slaughter scams, which involve an individual or group creating a false identity online to form fake relationships or friendships via social media, messaging and dating apps.

In a pig slaughter or romance scam, a fraudster would typically take weeks or months to establish the false relationship to gain the victim’s trust, before gradually shifting the conversation to investments and enticing them with ” investment opportunities that are often too good to be true.

Ultimately, the end goal is to trick the victim into investing in crypto through an impersonated version of a legitimate website such as UniSwap LLC and eth-Wintermute.net in this case or by transferring funds to a dubious wallet address.

Accompanying the hog slaughter, the alleged scammers are said to have deployed another tactic described as an advance fee scheme, where bad actors will demand large sums of money to process fake withdrawals from their scam sites.

If the victim falls for the trap, the scammer not only pockets the initial investment, but an additional share on top of that, before quickly cutting off any form of contact.

Related: Scammers impersonate the US State Department, claiming to help affected FTX users

The DFPI urges consumers to exercise extreme caution before responding to any solicitation offering investments or financial services. To verify whether an investment or financial services provider is licensed in California, the DFPI said.

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