The California Department of Financial Protection and Innovation has outlined the most frequently reported complaints related to cryptocurrency. Emphasizing “a rising trend in crypto-related complaints,” the regulator advised: “Be careful what you post and make public online. Scammers can use details shared on social media and dating sites to better understand and target you.”
Top Crypto Complaints
The California Department of Financial Protection and Innovation (DFPI) has revealed some of “the most common crypto-related complaints” received by its Consumer Services Office (CSO). The regulator stated:
A third-quarter 2023 CSO report indicated a rising trend in crypto-related complaints.
A common scenario involves consumers being tricked into transferring their crypto assets from legitimate crypto exchanges to fraudulent platforms or wallets. According to the complaints, consumers believe the legitimate platforms should have done more to prevent fraudulent activity from occurring. Another prevalent issue arises when consumers mistakenly transfer their cryptocurrencies to unidentified wallets, losing access to their funds.
Consumers also raise concerns about being persuaded to send U.S. dollars to scammers’ platforms, wallets, or banks for supposed crypto investments, only to discover they have been defrauded. “When the consumer identifies being scammed, she files a complaint against their bank stating the bank should have done more to prevent fraudulent activity,” the California regulator noted. Additionally, the DFPI receives complaints from consumers who have invested in seemingly profitable cryptocurrency investment opportunities, but upon attempting to withdraw their funds, they find themselves unable to do so and the scammers vanish.
Some complaints stem from genuine concerns regarding transactions or account activities on legitimate exchange sites. The regulator stressed:
This is not a scam, but consumers have the right to submit a complaint against a legitimate crypto platform.
Occasionally, consumers file complaints against DFPI-licensed Investment Advisors regarding crypto asset-related investment advice. The DFPI stressed: “Again, this may not be a scam, but consumers have the right to submit a complaint against a DFPI-licensed investment advisor.”
Moreover, consumers may be approached by scammers through text messages or emails. They pretend to know the victims and convince them to transfer their cryptocurrencies to scam sites. Consumers may also be approached by scammers on social media, particularly through “sweetheart scams” where the scammers feign romantic interest to manipulate the victims into sending them cryptocurrency.
The DFPI warned: “Be careful what you post and make public online. Scammers can use details shared on social media and dating sites to better understand and target you.” The regulator concluded:
Be especially cautious about online crypto-related investment offers. If it seems too good to be true, it probably is. Go slowly, ask questions, and do your own research.
Have you ever come across these crypto issues yourself? Let us know in the comments section below.
