State-Level Crypto Fraud Enforcement
Cryptocurrency-related fraud remains big business, with the FBI reporting $9.3 billion in cryptocurrency fraud losses in 2024, a 66% increase from 2023. In addition to federal enforcement, it is important to remember that state securities regulators play an active role in protecting investors against fraud, including in the crypto space.
State attorneys general have brought some high-profile cases against alleged crypto fraudsters. In March 2025, the New York Office of the Attorney General announced a $200 million settlement with Galaxy Digital Holdings over Galaxy’s efforts to promote the now-failed cryptocurrency Luna while hiding its intent to sell off its Luna holdings. The following month, the Oregon Attorney General announced the filing of a lawsuit against Coinbase for the unregistered sale of securities to Oregonians.
Beyond these headline-grabbing cases, there are other, ongoing state-level efforts to protect the investing public. The North American Securities Administrators Association (NASAA) is an organization of state, provincial, and territorial securities regulators. These regulators enforce state securities laws, which are sometimes known as “blue sky laws.” (That term comes from a catchy critique in turn-of-the-twentieth-century Kansas, warning against speculative investments based only on “so many feet of blue sky.”) State regulators have had a longstanding role in policing crypto. In a July 2025 letter to leaders of the US Senate Committee on Banking, Housing, and Urban Affairs, NASAA’s president pointed out that there have been 334 crypto-related enforcement actions by state regulators since 2017.
NASAA’s most recent Enforcement Report, a 2024 publication, reveals that in 2023 NASAA members received 7,914 tips and complaints from the public and 1,467 referrals from other agencies and institutions, mainly the SEC and FINRA. Among new investigations opened in 2023, NASAA reported “343 cases involved digital assets other than staking and non-fungible tokens (‘NFTs’) [and] 144 involved staking.” And state-level investigations are leading to enforcement. For example, “state regulators reported 37 enforcement actions involving digital asset staking and 155 enforcement actions involving other digital assets” in 2023.
Beyond using existing blue sky laws as a basis for enforcement, many states have shown interest in legislation to specifically addresses cryptocurrency. Per the National Conference of State Legislatures, at least 40 states have introduced or pending legislation regarding cryptocurrency and other digital assets on their dockets for the 2025 legislative session.
While we may be used to thinking of crypto fraud at the national or even international level, data is available to show which states are hotbeds of crypto crime. The FBI’s Internet Crime Report compiles crypto-related crime statistics by state. California was ranked number one in 2024, with 19,508 complaints and $1,393,628,996 in cryptocurrency losses. Texas came in second, with 11,270 complaints and $738,583,341in losses.
Crypto may seem like a new frontier, but crypto fraud promises the same old piece of pie in the blue sky. State regulators have shown that they have the basic tools and, increasingly, the will to combat it. All that is needed now are more states with whistleblower rewards programs to fill the gaps and leverage insider knowledge, similar to the steps already taken by several states.
This piece was written by Liz Soltan of Whistleblower Partners.
