Crypto scam red flags: how to spot a scam before you pay

By the Blockhorizon Editorial Team · Updated 2 October 2026 · How we check facts

How big is the crypto scam problem?

Large, and these are only the losses people report. The FBI’s Internet Crime Complaint Center (IC3) recorded $11.366 billion in crypto-related losses in 2025 across 181,565 complaints. Of that, crypto investment fraud alone accounted for $7.228 billion from 61,559 complaints, and complaints in that category rose 48% on 2024.

People aged 60 and over reported the largest crypto-related losses of any age group in the FBI’s 2025 figures. The US Federal Trade Commission (FTC) separately reported $15.9 billion in consumer fraud losses for 2025, with investment scams the top category at over $7.9 billion, and said the highest total losses were paid by bank payments, “followed by cryptocurrency”.

The FBI and FTC count different reports, so their figures should not be added together.

What are the biggest red flags of a crypto scam?

Regulators’ lists overlap heavily. Treat any one of these as a reason to stop:

• Contact out of the blue. The FCA says scammers “often call out of the blue”; the SEC warns about unsolicited pitches. The same goes for DMs, dating-app matches and social-media “mentors”.
• Promises of guaranteed or very high returns. The SEC lists promises of “guaranteed returns” and “risk-free” opportunities as red flags. The CFTC says websites promising returns of “50, 75, 100, 200 percent or more” are a scam sign. The CFTC’s own reminder: there is no such thing as a guaranteed investment.
• Pressure to act now. Bonuses “if you invest quickly” (FCA), limited-time offers (CFTC) and high-pressure sales tactics (FTC).
• A “secret method” or “proven system”. The FTC names these phrases specifically.
• Unusual payment requests. Paying by gift card, credit card, wiring money abroad or to a personal account (SEC), or being told to convert your money to crypto before you can deposit (CFTC).
• A flattering personal story. The FCA notes scammers may say you’ve been “specially chosen”, build a friendship or play on your emotions.

How can you tell if a trading website or app is fake?

The CFTC publishes a checklist of signs of a scam crypto or forex trading website. Among them:

• a missing, fake or offshore address, and no customer-service phone number;
• a website much newer than the company claims to be, or poor overall quality;
• unknown “awards” and testimonials that look fake;
• refusing bank transfers and asking for crypto only.

The FCA describes how fake platforms advertise through social media and search engines, often with fake celebrity endorsements. They tend to show impressive early “profits” on your account, push you to deposit more or recruit friends, then suspend your account and disappear.

A balance that shows big profits proves nothing. On a fake platform the numbers on screen are whatever the scammer wants you to see.

What is a recovery scam?

After one scam, victims are often targeted again. The FCA calls these “recovery room” scams: someone offers to get your lost money back in exchange for upfront “tax, solicitor or administrative fees”. They may impersonate the FCA or claim to work with the government, the police or another regulator, and the FCA notes they may be the original scammers or people who bought lists of victims.

The FTC’s rule of thumb is simple: government agencies and legitimate organisations will never ask for money to help you get a refund. Do not pay upfront for refund or recovery help.

How do you check whether a crypto firm is real?

Use the regulator’s own register, never a link sent to you by the firm:

• UK: the FCA Financial Services Register and the FCA Warning List of unauthorised firms. The FCA also warns about “clone firms” that copy a real firm’s name and details, so check the contact details on the register match the ones you were given.
• US: Investor.gov’s professional search and the CFTC’s RED List of unregistered foreign entities.
• EU: ESMA’s registers and your national regulator. EU supervisors say that with providers not regulated in the EU, you may not benefit from any consumer protection.
• Worldwide: IOSCO’s I-SCAN portal gathers investor alerts published by securities regulators.

Being on a register is necessary but not enough: in 2023 the SEC noted that the major crypto platforms are not registered with it as broker-dealers or exchanges, and UK and EU regulators say compensation schemes are unlikely to cover crypto losses.

What should you do if you think you have been scammed?

1. Stop paying. Do not send more money to “unlock” a withdrawal or pay a “tax” or “fee”.
2. Do not share more details. The FCA advises never giving bank or card details unless you are certain who you are dealing with, and not downloading software from untrusted sources.
3. Report it. In the US, to the FBI’s IC3 and the FTC. In the UK, the FCA asks you to report scams to it and to Report Fraud.
4. Expect recovery scams. Anyone who contacts you offering to get your money back for a fee is a red flag (see above).

Before you put money anywhere, read how crypto custody works and check the numbers with our crypto profit calculator — real returns include fees and can be negative.