Before investing in crypto, check out California’s new scam tracker is good idea

After losing about two-thirds of their value in 2022, cryptocurrencies have regained a little of their market mojo since then — they’re now worth about half what they were last April, according to TradingView.

So you may be tempted to respond to one of the countless crypto sales pitches that land in your inbox and your browser, hoping that it’s a real rally and not a dead-cat bounce.

Before you put your money at risk, however, the California Department of Financial Protection and Innovation has a new website worth visiting.

Launched Thursday, the DFPI’s Crypto Scam Tracker is a searchable collection of the complaints the agency has collected about crypto offers that now seem too good to be true. The complaints have been reviewed by the agency but not verified, so it’s a bit like a database of confirmed angry Yelp reviews. Nevertheless, it’s valuable in at least three ways.

First, you can search for complaints about the company or website you’re thinking of doing business with. Have other people gotten the same pitch, and if so, how has that worked out for them?

Scam sites tend to appear and disappear quickly, though, so the absence of complaints is not by itself proof of legitimacy.

Second, you can search for keywords that appear in the pitch you’re considering, such as “forex” if the offer involves foreign currency trades or “deposit” if the business wants you to deposit a certain amount. Look for similarities between what you’ve been offered and what other consumers have complained about.

Third, the site includes a glossary that describes an array of scams that fraudsters are perpetrating in the crypto market. At the very least, be sure to read the entry on “Pig Butchering Scams.” You most certainly do not want to fall for one of those.

“We have heard from consumers that scam alerts help them avoid similar scams,” said Elizabeth Smith, a spokesperson for the DFPI. “Our hope is that this tool will be a resource for Californians to use before they are targeted or make financial decisions and help Californians from falling prey to prevent future scams. We also want to encourage people to report scams — it helps us keep all Californians safe.”

Where the site may be most helpful is in the patterns it reveals in the behavior of crypto rip-off artists. A frequent theme in the complaints is scammy behavior by sites with names that echo a well-known crypto brand, with just a few letters changed.

According to the DFPI, such “imposter” websites are one of the most commonly reported scams.

“The companies or websites listed may sound similar to the names of other companies or websites that also operate in the marketplace,” the agency said. “When companies or websites [fake or not] have look- or sound-alike names, the potential confusion created for consumers is real.”

Efforts to connect to the coinbasetv site and obtain comment were unsuccessful.