California Attorney General Rob Bonta warned residents Monday to be on the lookout for several different types of fraud and scams related to cryptocurrency that have been reported recently.
The advisory came as part of an ongoing effort by the Attorney General’s Office to keep the public informed about risks associated with cryptocurrency.
Americans lost about $11.4 billion to cryptocurrency-related scams in 2025, according to the FBI’s Internet Crime Center.
Bonta’s advisory came days after a settlement was announced between the Attorney General’s Office and Fidelity Digital Asset Services that resolved complaints that the company was restricting customers from withdrawing funds when they wanted to. A similar settlement was reached with Robinhood Crypto in 2024.
Bonta declined to say at a press conference in San Francisco’s Potrero Hill neighborhood on Monday whether there were any other investigations into other companies engaged in similar activity.
But he warned of a variety of scams and “red flags” that residents in the state should be aware of related to the crypto industry, including those that use artificial intelligence to mimic a familiar person’s appearance or voice, and so-called “meme coins” that are backed – or appear to be backed – by a celebrity or influencer.
Such cryptocurrency coins are known for a type of scam called a “rug pull,” in which the issuer of the digital currency attracts investors, driving up the price, before suddenly selling a large share that lets them make a profit but drives the price down for investors, making the coins essentially a way to transfer wealth to the issuer.
Recent instances of allegations of rug pull scams have been leveled against President Donald Trump, former president Joe Biden’s son, Hunter Biden, and influencer Hailey Welch, known as the Hawk Tuah Girl.
Rug pull scams are also perpetrated by online groups that enthusiastically back a coin and hype it to other online users, only to sell their shares and devastate new investors.
Bonta singled out cryptocurrency ATMs as one of the riskiest crypto products and said they should never be used. The machines allow users to buy, sell, and transfer cryptocurrency in-person by accessing digital “wallets” that are used as crypto accounts. They are often placed in businesses by third party companies that Bonta said skirt consumer protection laws because of the anonymous nature of cryptocurrency wallets.
There are at least 60 in San Francisco, according to the state Department of Financial Protection and Innovation. Many of them are located in Safeway grocery stores. While operators are supposedly licensed by the state and therefore publicly available, visits to multiple local stores and a Google search revealed there are likely many more than the state’s list shows.
In response to a question about legislation to ban the machines, Bonta said it would be up to policy makers to craft such a bill and he would not comment on hypothetical legislation. But he said while they are in operation, crypto ATMs should be universally avoided.
“Never use a crypto ATM,” Bonta said. “Never use them. Don’t use crypto ATMs. Scammers push victims to these machines because, once the money goes in, it can’t be reversed, it can’t be easily traced. These ATMs are not backed by trustworthy companies and lack consumer protections.”
Vermont, Tennessee, Minnesota, and Indiana have passed legislation banning the machines. In California, the city of San Diego is considering local legislation to require scam warning signs on the ATMs, which are also referred to as kiosks.
Bonta said other scams to be aware of include what is known as “pig butchering,” which involves a person pretending to be a love interest who requests large sums of money from victims.
“Sextortion” occurs when someone threatens to release compromising material, such as photographs or videos, in exchange for money or some other demand. Bonta advised victims of such scams to ignore threats and block anyone making them. He said the maneuver is most often a bluff, and that the material is rarely released.
“Liquidity mining” is a type of scam that promises passive income by connecting a real digital wallet to a fake one, and is often deployed on gaming platforms. The scam involves displaying a fake dashboard to make the user think they are collecting small amounts of cryptocurrency over time, only to see their real assets wiped out.
He said other classic scam routines such as gaining a person’s trust through phone calls and other contacts and obtaining passwords or other sensitive information have also been reported, in some instances targeting a previous scam victim by pretending to be someone who can help them recover their money from the first scam.
Beware of promises of large returns for small investments, be cautious about unsolicited emails or phone calls and do not provide personal information, Bonta advised. Verify the contact with the source before providing any information by calling the purported business directly and double-checking email addresses. Pause and take nine seconds before acting.
The signing of Senate Bill 1208 in early October by Gov. Gavin Newsom will help the Attorney General’s Office have new tools to recover stolen cryptocurrency, according to Bonta, who sponsored the legislation.
He said the law would make it easier for investigators to access stolen funds.
“It allows them to petition a court to return the cryptocurrency to victims, even when the perpetrators are outside of US jurisdiction,” he said.
Bonta also urged victims not to be embarrassed, as scams have proliferated and become sophisticated and have entrapped a variety of victims.
Scams involving cryptocurrency and other types of financial manipulation can be reported to the Attorney General’s Office at oag.ca.gov/report.
