Cryptocurrency fraud drains billions of dollars from victims every year, and many schemes present themselves as legitimate investments long before the damage becomes visible. Drawing on data from the FBI, Chainalysis, the Commodity Futures Trading Commission (CFTC) and other organizations, this guide outlines ten warning signs that a cryptocurrency, app or trading site may be a scam.

No single sign proves fraud on its own. But when several appear together, they are a strong reason to stop and verify everything before sending any money.

How Big Is the Crypto Scam Problem?

The FBI's Internet Crime Complaint Center logged about $9.3 billion in crypto-related losses in 2024, based on nearly 150,000 complaints — a total up 66% from 2022. Investment fraud accounted for $5.8 billion of the 2024 figure, a category that includes pig butchering schemes in which a scammer builds trust with a victim before pushing a fake investment.

Group-IB, a cybersecurity firm, cites an estimate of $17 billion in crypto scam losses for 2025, a figure tied to AI-enabled fraud and large, organized scam operations.

Scammers favor crypto for several reasons: it moves quickly and across borders, confirmed transactions cannot be reversed, and — as the Federal Trade Commission (FTC) notes — crypto payments do not carry the legal protections that credit cards provide. Although some transaction details are publicly visible on the blockchain, linking a wallet to a real person remains difficult, which helps fraudsters hide.

Signs 1 and 2: Promises of Big Returns

Sign 1: Guaranteed or very high profits

The FTC says only scammers guarantee profits or big returns. No one can promise that a crypto investment will make money, and nothing about crypto is low risk: prices can swing by the hour, and the FTC notes that an investment worth thousands of dollars today might be worth only hundreds tomorrow.

CommBank likewise lists low-risk, high-return offers and claims about trading systems that use AI or algorithms as signs of a scam. Phrases such as "guaranteed profit" and "risk-free trading" are red flags, according to DataExpert.

Sign 2: Returns that depend on how much you pay in

The CFTC warns about fake sites offering "investment plans" that promise returns of 50, 75, 100 or 200 percent or more, with the promised payout growing alongside the deposit. These upgrades are designed to coax ever more money out of victims.

Binance Academy describes a similar case: a scam site offered higher VIP tiers for larger deposits and a 10% rebate for paying in USDT. The victim was never able to withdraw the funds.

These setups often operate like Ponzi or pyramid schemes. A Ponzi scheme pays old investors with money from new ones, while a pyramid scheme pays people for recruiting others. Binance Academy notes that both models are mathematically unsustainable and will collapse.

Sign 3: Contact Out of the Blue

Yorkshire Building Society says two thirds of crypto scams start on social media, with others beginning via text, email or phone call. The CFTC reports that the vast majority of crypto and forex frauds begin on social media or messaging apps.

The FTC describes a common version: a so-called investment manager makes unexpected contact and offers to grow your money, directing you to a site that looks real but is fake. Binance Academy documents scam ads on Facebook and Instagram that funnel people into WhatsApp and Telegram groups, where most members are fake accounts pushing specific coins.

Celebrity endorsements are another trick. The FTC stresses that celebrities do not contact people on social media to multiply their crypto, and Yorkshire Building Society adds that endorsement images and videos are often made or altered with AI tools.

Signs 4 and 5: Trust First, Then Pressure

Sign 4: Personal contact first, investing later

Pig butchering is one of the fastest-growing and highest-loss scam types, according to Binance Academy. The scammer spends days, weeks or months building trust before the talk turns to investing, then guides the victim to a fake trading platform that displays made-up profits. Early on, a small withdrawal may succeed — building confidence and leading to bigger deposits.

In 2024, investment fraud made up about 62% of the FBI's crypto-related losses. In its first three months, the U.S. Department of Justice Scam Center Strike Force confiscated more than $578 million in crypto linked to these networks.

Some scammers also act as "coaches." Yorkshire Building Society says a coach may explain how to get around bank scam checks and may script what the victim says if the bank asks questions. DataExpert additionally warns about requests to share your screen or install tools such as AnyDesk or TeamViewer, which give the other person control over your device.

Sign 5: Pressure to act fast

Scammers push targets to move before they can think — claiming the market is "about to break out" or that an "exclusive opportunity" is closing soon, DataExpert reports. CommBank advises people not to be pressured, noting that scammers use the complexity of crypto to confuse victims. Yorkshire Building Society says feeling rushed is itself a sign that a scam is underway.

Sign 6: Demands to Pay in Crypto

The FTC states plainly that only scammers demand payment in cryptocurrency: no legitimate business or government agency will ask you to send crypto in advance, whether to buy something or to protect your money. Fraudsters pose as well-known companies, banks, government agencies and even employers, claiming an account is at risk and then instructing the victim to buy crypto to fix it.

Crypto ATMs are a growing channel. The FBI reports that losses from crypto ATM scams reached $333.5 million between January and November 2025, and more than 85% of reported losses were by adults over 60. In some cases, the FTC says, scammers stay on the phone while victims use the ATM, giving step-by-step directions and a QR code that sends the money straight to the scammer's wallet.

The CFTC points out another clue: a fake platform often will not accept bank transfers, instead walking users through buying crypto on a real exchange and then sending it on. Bank transfers and card payments have fraud checks; blockchain transfers do not.

Signs 7 and 8: A Platform That Does Not Check Out

Sign 7: No registration, address or phone line

The CFTC says firms that sell forex or derivatives to U.S. customers register with the CFTC and join the National Futures Association. Crypto trading platforms are treated as money service businesses and must register with FinCEN, and many states have their own rules. Registration alone does not protect against fraud, but the CFTC says most scams involve unregistered firms, people and products — which makes registration status one of the first things to check before opening an account anywhere.

Missing contact details are another warning. A site with no company address likely does not want you to know where it is, the CFTC says, and a site with no customer service phone line is a sure sign of a scam. DataExpert also lists a missing company registration number.

Sign 8: Details that do not add up

The CFTC suggests checking the domain age at lookup.icann.org: if a firm claims years of history but the domain is a few weeks old, it is a scam. Other clues include broken links, spelling errors and awards you have never heard of. Fake testimonials are also common, and the agency advises searching the site name alongside words such as "scam," "fraud" or "reviews."

Group-IB's research shows the scale such operations can reach. The CryptosLabs ring allegedly stole about 480 million euros from French-speaking victims in France, Belgium and Luxembourg, using more than 350 domains and impersonating over 40 banks, fintechs and crypto platforms. Fake "account managers" called victims and urged them to deposit more.

Signs 9 and 10: Hype and Blocked Withdrawals

Sign 9: Hype with little behind it

Some scams rely on hype. In a pump-and-dump, promoters push a token to drive up the price and then sell; in a rug pull, developers take the money and abandon the project. Group-IB reports that rug pulls caused more than $6 billion in damage in 2025, with price peaks usually coming within 70 seconds of the pump signal.

Two cases illustrate the pattern. Group-IB says 17 wallets moved $227 million in OM Mantra tokens to exchanges before the price fell 90%. The $LIBRA token reached a $4.56 billion market cap before insiders sold, and the price dropped 94%.

Binance Academy suggests asking a few questions before you buy: Is the token supply held by a small number of wallets? Who is on the team, and what is their record? Is there a clear whitepaper and an independent audit of the code? CommBank gives similar advice for initial coin offerings, warning about unrealistic returns, vague goals, no clear use for the token and pressure to buy early.

Sign 10: You cannot withdraw your money

This is the sign most victims notice last. DataExpert says scammers ask for extra fees, taxes or verification costs before releasing funds, whereas real platforms state fees up front and never require more deposits to release your own money. Eventually the site may stop working and your contact may stop replying — and then a second scam can follow, in which someone offers to recover your money for a fee while the recovery never happens.

Newer Tactics: AI, Deepfakes and Wallet Drainers

Classic scams are now being amplified by AI tools. Group-IB cites a Chainalysis report finding that scams linked to AI service providers earned an average of $3.2 million per operation — roughly 4.5 times as much as schemes without AI.

Deepfakes can copy the voice and face of exchange staff, public figures or family members. Binance Academy advises checking any unexpected message through official channels, no matter who it claims to be from.

Wallet drainers are another threat. Group-IB says the Inferno Drainer kit stole from more than 30,000 wallets over six months in 2024 and 2025, even after a shutdown in late 2023, and such kits can cost less than $500 on Telegram. One campaign posed as a tax authority and asked victims to pay crypto tax fees; victims either typed in seed phrases or signed transactions that drained their wallets.

The rule is simple: no real service will ask for your seed phrase or private key, and Binance says it will never ask for your password.

What To Do If You Think It Is a Scam

Stop sending money right away. DataExpert says to ignore demands for "recovery fees," taxes or verification costs, since these are usually attempts to take more.

Save chats, emails, transaction records and screenshots, write down names, phone numbers and websites, and then report the case to the police. In the U.S., the FTC lists several places to report crypto fraud: ReportFraud.ftc.gov, CFTC.gov/complaint, sec.gov/tcr, ic3.gov and the exchange you used — and complaints filed with ic3.gov are the basis for the FBI's loss totals, including the $9.3 billion logged in 2024. In Australia, CommBank points to the Australian Cyber Security Centre and the IDCARE support line.

The common thread across these scams is pressure combined with an offer that looks too good to be true. Checking each claim on your own, before you send anything, is the best defense.

Sources

• Common Cryptocurrency Scams and How to Avoid Them (Binance Academy)
• Caution on the Rising Number of Crypto Scams (Binance Support)
• What To Know About Cryptocurrency and Scams (Federal Trade Commission)
• Crypto scams (CommBank)
• Cryptocurrency Scams: The 10 Most Common Types and How They Work (Group-IB)
• How to recognize crypto fraud: 10 signs you may have become a victim (DataExpert)
• 10 Signs of a Scam Crypto or Forex Trading Website (CFTC)
• How to spot and avoid cryptocurrency and bitcoin scams (Yorkshire Building Society)

This report was originally published by Blockonomi at https://blockonomi.com/how-do-you-know-if-a-cryptocurrency-is-a-scam/.