On October 19, California Attorney General (AG) Rob Bonta issued a consumer alert warning residents about the risks associated with a “prolific volume” of cryptocurrency scams nationwide. According to the alert, FBI data shows that Americans lost $20.9 billion to internet-based scams in 2025, $11.4 billion of which resulted from crypto scams. The alert stated that these scams use the same tactics as traditional gift card or cash fraud but use digital assets to move money faster and get around physical safeguards, allowing scammers to “remotely extract massive, life-altering sums of money in minutes.” The alert identified several common cryptocurrency scams, including sextortion, AI-driven scams using deepfakes, fraudulent “liquidity mining” or “yield farming” platforms, recovery fraud, “rug pulls,” and “confidence scams.” The alert urged consumers to, among other things: (i) never use cryptocurrency ATMs; (ii) watch for red flags, such as guaranteed returns and demands for payment in crypto; and (iii) verify credentials before investing.

The AG also highlighted SB 1208, a recently signed law sponsored by the AG that gives state law enforcement and prosecutors a new tool to return stolen digital assets to victims of cryptocurrency fraud. According to the alert, the law: (i) allows law enforcement that seizes digital assets under a search warrant to seek distribution of those assets to fraud victims when the assets are proceeds of, or were used to facilitate, the underlying crime, including where the assets have been commingled with other funds; (ii) permits law enforcement to petition a court to return seized cryptocurrency to victims where a conviction is not possible; and (iii) establishes a consistent procedure for claimants to establish the legitimacy of their claims to seized property. The alert noted that victims are often unable to trace the laundered assets themselves, and that law enforcement cannot always prosecute bad actors who are outside U.S. jurisdiction. Digital assets not returned to victims will be deposited in the State Restitution Fund and used exclusively to provide victims with necessary services. The alert also noted that the California Department of Justice is fighting the scammers by shutting down fake websites.