California-based regulator launches Crypto Scam Tracker

Regulators and law enforcement agencies around the world have been exploring ways to root out cryptocrime and expel bad players from the industry. The California Department of Financial Protection and Innovation (DFPI) took its efforts to the next level with a new launched crypto scam tracker.

Reports say the regulator launched the security tool zDFPI on February 16. According to DFPI, it designed the crypto fraud tracker based on user complaints.

DFPI A blocklist-like fraud alert tool to protect crypto users

After observing several complaints from fraud victims, DFPI decided to take action by developing a security tool that can alert users to potential fraud and protect them from losing their money.

The fraud tracker comes with the department’s list of complaints from victims of crypto-related fraud. In its complaint list, DFPI described losses incurred in transactions that victims identify as part of fraudulent or deceptive operations. But the DFPI said it has yet to verify the scams listed, noting it receives thousands of consumer and investor complaints annually.

In a statement, DFPI Commissioner Clothilde Hewlett said fraudsters lurk in the shadows, using public interest in crypto assets to exploit vulnerable Californians. The commissioner added that the DFPI is taking steps to identify criminals through the new crypto fraud tracker. The department is also adding other stringent enforcement efforts to expose these fraudulent operations and protect consumers.

DFPI: Most crypto scams originate from social media and fake websites

According to the DFPI, most of the 36 complaints listed in the tracker was from social media and social engineering scams. The fraudsters tricked users into making purchases through Facebook, WhatsApp, Instagram, TikTok and dating applications. When users respond accordingly, fraudsters gain access to steal their money.

According to the DFPI, four-fifths of complaints are “pork slaughter scam.” A hog slaughter scam is a process where scammers flatter their victims and slowly gain their trust before carrying out the target act. This type of scam is prevalent on social media.

The DFPI also described other ways in which fraudsters operate. According to the California agency, fraud websites is also among the scams most frequently reported by crypto consumers.

In detail, the DFPI said that company and website names that are similar or similar in sound are often potential causes of confusion among consumers. Consumers find it difficult to identify an original website from a fake one. Fraudsters create fake domains for websites to impersonate businesses and confuse unsuspecting consumers.

The agency too explained that scammers promote high-return investment programs to entice and entice vulnerable users to pour money into the scam. The tracker also has a search feature that enables users to look up suspicious websites and crypto projects to identify if they are scams.

In the report, DFPI spokesperson Elizabeth Smith commented on the new development. In her words, the DFPI heard from consumers that “Fraud Alerts” help prevent others from falling victim to similar scams.

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