New York Alerts: $8B Lost to Crypto and AI Impersonation Scams

New York regulators and law enforcement issued a statewide notice warning consumers about an increase in scams that pair bogus cryptocurrency platforms with artificial-intelligence impersonations. The notice reports total reported losses of $8 billion tied to these schemes.

The notice describes scams that use cloned websites and social accounts, phishing messages, social media ads, direct messages, text messages and phone calls. Fraudsters are using AI-generated audio and video to impersonate company executives, investment advisers and family members, and to promote fake airdrops and counterfeit trading platforms.

Scammers pressure victims to deposit funds or transfer digital assets. Fake exchanges gather login credentials and private keys, bogus investment offers promise guaranteed returns, and fraudulent customer support lines coerce transfers. Some operations use QR codes or deliver malware to access victims’ digital wallets.

Officials noted that recovering funds is often difficult because transactions can move quickly and cross international borders. The notice urges victims to preserve transaction records, screenshots and communication logs to help investigators and firms attempting to trace stolen assets.

The state’s guidance tells consumers to verify that trading platforms and investment advisers are registered with state or federal regulators, check website URLs and app authenticity, enable strong passwords and two-factor authentication, and be skeptical of unsolicited offers that demand quick action. It advises verifying unexpected audio or video requests for money through a separate trusted channel before acting.

Regulators said they are increasing monitoring and coordinating with federal partners and industry groups to shut down fraudulent platforms and pursue perpetrators. They plan to expand public education efforts to help residents recognize and avoid common fraud techniques.

Consumer advocates recommend using regulated exchanges for cryptocurrency transactions and consulting licensed financial professionals before making significant investments. The notice links the rise in these scams to growth in crypto markets and wider public attention to generative AI and states that fraudsters are exploiting both trends.