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California Regulator Alleges Fraud to Flag 17 Crypto Exchanges

The Department of Financial Protection and Innovation (DFPI) in California identify 17 fraudulent crypto exchange platforms. Over the past two days, DFPI has warned investors from engaging in business with 17 crypto brokers and websites. 

Crypto Exchanges to Avoid

According to DFPI, this year, the number of crypto scams has steadily increased, exposing investors to huge losses. The financial regulator alleged that the listed firms contravened California consumer protection laws. Notably, DFPI listed the 17 crypto firms violating California consumer law on the company website to warn investors.  

Despite fraudulent transactions, DFPI proclaimed that some of the listed fraud firms imitated leading crypto exchanges UniSwap and Wintermute based in the UK. DFPI argued that the scammers used Instagram, Twitter, and Facebook to lure customers into unethical businesses.


California Regulator Acts on Crypto Scam

The California crypto community argued that it was strange for DFPI to post numerous alerts simultaneously. A similar case occurred on June 15 when the regulator alleged fraud to flag 26 crypto exchanges.

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DFPI claimed that investors had lamented losing substantial amounts from $2000 to $1.2 million to scammers. 

In early September, DFPI reported issuing a cease to 11 crypto trading platforms for violating the securities law. The 11 embattled firms were accused of selling unapproved securities. Also, the mentioned firms were suspected of resource misappropriation.

DFPI reported that the 17 cryptos engaged in pig-slaughtering scam activities involving fake identity use. Such scams involved developing fake friendships over the internet and luring customers to invest in fake crypto trading platforms.

Surprisingly, scammers are improving by implementing different scam techniques, such as the advanced fee method. The method involved demanding sizeable amounts from the customer to process fake redemption and bonuses available on scammers’ websites.

DFPI observed that the scammers blocked the complaints after executing their tasks.

DFPI Stringent Rule on Scam  

DFPI encouraged customers to be extra careful when dealing with investment and financial services. Also, the consumers must obtain first-hand information to evaluate whether the service provider is legally allowed to conduct business in California. 

📰 Also read:  Nigerian SEC to Increase Registration Fee for Cryptocurrency Exchanges

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Stephen Causby

Stephen Causby is an experienced crypto journalist who writes for Tokenhell. He is passionate for coverage in crypto news, blockchain, DeFi, and NFT.

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