AG: Members of Gen Z increasingly becoming victims of crypto scammers
LOS ANGELES (KESQ) - High-tech fraudsters aren't just targeting elders, law enforcement throughout California is seeing a sharp rise in reports of Gen-Z -- or people born from 1997 to 2012 -- being preyed upon by cryptocurrency rip-off artists on platforms like Twitch, TikTok and Instagram, officials said Monday.
Crypto scams use the same psychological playbooks and social engineering themes as traditional gift card or cash fraud, but they leverage the mechanics of digital assets to maximize speed and bypass physical safeguards.
In 2025, Americans lost $20.9 billion to internet-based scams, with $11.4 billon of that loss specifically resulting from crypto scams, according to state Attorney General Rob Bonta.
"These are the same age-old scams we've always fought, but with the rise of widespread access to cryptocurrency, predators have found an insidious new means to take your money,'' Bonta said in a statement Monday. "Cryptocurrency fraud has rapidly become the nation's costliest cybercrime, with syndicates now weaponizing generative AI, deepfakes, and malicious smart contracts to drain digital wallets in minutes. I strongly urge all Californians to protect themselves and their loved ones: stay informed, guard yourself with knowledge, never use a Cryptocurrency ATM, and report it if you have been scammed.
While traditional mechanisms for scams like gift cards often restrict fraud to lower dollar amounts and require physical purchase or resale, cryptocurrency allows fraudsters to remotely extract massive, life-altering sums of money in minutes.
By avoiding face-to-face contact with real humans who might flag suspicious behavior, scammers utilize the speed and pseudonymity of decentralized digital wallets or Bitcoin ATMs to ensure funds cannot be reversed or easily traced.
While browsing, gaming, streaming, scrolling or interacting online, a good rule of thumb is to pause and take nine seconds before clicking, engaging, or sending money to anyone, Bonta says.
Generation Z is the demographic group succeeding millennials and preceding generation alpha, typically defined as people born from 1997 to 2012.
Common crypto scams include:
-- Sextortion, where a scammer threatens to share private, sexually explicit images, videos or information of victims unless they provide money, crypto, additional explicit content or sexual favors. Oftentimes, the scammer does not share the photos, they are only after money.
-- AI-Driven Super-Scams, when fraudsters deploy generative AI, voice clones and deepfake videos to impersonate loved ones or public figures.
-- The "Liquidity Mining'' Illusion, in which scammers trick victims into connecting their decentralized wallets to fraudulent "yield farming" or gaming platforms. Victims see fake passive income accumulate on a falsified dashboard before a malicious smart contract completely drains their real wallet.
-- Recovery Fraud, when after victims realize they've been defrauded they're frequently targeted a second time by the same network posing as fake ``blockchain recovery experts'' or law enforcement promising to hack back the stolen funds for an upfront fee.
-- The "Rug Pull'' Scam, in which victims are lured into online investment groups or streaming communities and convinced to invest in low- priced stocks or deal in volatile cryptocurrencies. The scammers advertise, hype and recommend buying the stocks or cryptocurrencies, increasing their
prices, then sell when the price is high, while the victims lose their money.
