Gen Z warned over new wave of crypto scams on TikTok and Instagram as Americans lose billions

Young Americans are being warned about increasingly sophisticated cryptocurrency scams spreading across TikTok, Instagram, Twitch and online gaming platforms, with fraudsters using artificial intelligence and deepfakes to steal money in minutes.

California Attorney General Rob Bonta issued the warning Monday, saying criminals are targeting Generation Z — people born between 1997 and 2012 — through social media, livestreams and digital investment schemes.

Americans lost $20.9 billion to internet-based scams in 2025, including $11.4 billion attributed to cryptocurrency fraud, according to figures Bonta cited.

Common online cryptocurrency schemes

“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.

He warned that scammers increasingly use AI-generated impersonations, fake investment platforms, and malicious software to drain victims' digital wallets.

Unlike traditional scams involving cash or gift cards, cryptocurrency transactions let criminals transfer large sums remotely and make stolen funds extremely difficult to recover.

Authorities identified several common schemes targeting young people online.

One involves sextortion, in which criminals threaten to release intimate images or personal information unless victims send money or cryptocurrency.

Others use AI-generated voices and deepfake videos to impersonate relatives, celebrities or trusted figures.

Tactics used to drain digital wallets

Fraudsters also lure victims into fake cryptocurrency investment or gaming platforms that appear to generate profits. In some cases, connecting a digital wallet to a fraudulent service allows malicious smart contracts to steal its contents.

Another tactic, known as a “rug pull,” involves promoting a cryptocurrency to drive up its price before the scammers sell their holdings, leaving other investors with losses.

Victims can also be targeted a second time by criminals posing as cryptocurrency recovery specialists or law enforcement officials who promise to retrieve stolen funds in exchange for upfront payments.

Advice from the attorney general

Bonta urged Californians to be particularly cautious when approached with investment opportunities or requests for cryptocurrency payments through social media.

He recommended taking at least nine seconds to reconsider before clicking suspicious links, engaging with unfamiliar accounts or transferring money.

“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,” Bonta said.

The attorney general also warned consumers against using cryptocurrency ATMs to send money to strangers, noting that scammers frequently exploit such transactions.

Anyone who believes they have been targeted is encouraged to report the incident to authorities.