Cryptocurrency scams have surged in recent years, resulting in billions of dollars in financial losses. In 2023, the U.S. Federal Bureau of Investigation (FBI) reported a 45% increase in cryptocurrency-related fraud compared to 2022, with total losses exceeding $5.6 billion. This alarming trend highlights the growing sophistication of scammers and the increasing vulnerability of investors (FBI).
This article explores the most common scams, notable incidents, and ways to protect yourself from becoming a victim.
Understanding the Different Types of Cryptocurrency Scams
Fraudsters use a variety of tactics to deceive investors. Below are some of the most common types of cryptocurrency scams:
Investment Scams
Investment scams account for approximately 71% of all cryptocurrency-related losses. These scams involve fake investment platforms promising guaranteed high returns. Victims deposit funds, only to realise later that withdrawals are impossible (FBI Report).
Phishing Attacks
Scammers send fraudulent emails, text messages, or social media messages that appear to be from legitimate exchanges or wallet providers. These messages often contain malicious links that steal login credentials or private keys.
Rug Pulls
In a rug pull, developers create a new cryptocurrency or DeFi project, heavily promote it, and encourage people to invest. Once a significant amount of money is raised, the team vanishes, leaving investors with worthless tokens. One of the most infamous rug pulls was the Squid Game Token scam, which saw developers disappear with over $3.3 million.
Ponzi & Pyramid Schemes
These scams involve using new investors' money to pay returns to earlier investors, creating the illusion of profitability. Eventually, when new investments slow down, the scheme collapses.
Fake Giveaways
Scammers impersonate celebrities, crypto influencers, or companies, claiming to offer free crypto in exchange for a small "verification" deposit. Once victims send funds, the scammer disappears. A notable example involved scammers impersonating Elon Musk, stealing millions from unsuspecting investors.
Recent High-Profile Crypto Scam Incidents
Cryptocurrency scams are not just limited to small-scale frauds; even major platforms and exchanges have fallen victim to malicious attacks.
Bybit Exchange Hack (2025)
In February 2025, Dubai-based exchange Bybit suffered one of the largest crypto exchange hacks in history, losing 400,000 Ethereum (ETH) (worth approximately $1.5 billion). The attack is suspected to have been orchestrated by North Korean hackers from the Lazarus Group (Lazarus Group).
Pig Butchering Scams (2024)
A growing romance and trust-based scam, "Pig Butchering" involves scammers building long-term relationships with victims, convincing them to invest in fake crypto trading platforms. Losses from these scams increased by nearly 40% in 2024 (Chainalysis).
Who Is Being Targeted?
While cryptocurrency scams affect people across all demographics, certain groups are particularly vulnerable:
Older Adults
In 2023, individuals over 60 years old lost over $1.6 billion due to crypto scams. They are often targeted through fraudulent investment schemes and phishing emails (FBI Data).
Wealthy & Educated Investors
Surprisingly, research shows that university-educated individuals and homeowners are increasingly falling victim to scams. Many suffer from overconfidence, leading them to overlook potential red flags in investment offers (News.com.au).
How to Protect Yourself from Crypto Scams
Verify Platforms & Projects
Always research the credibility of a crypto platform or project before investing. Use sources like CoinGecko or CoinMarketCap.
Be Skeptical of High Returns
If an investment guarantees "high profits with no risk," it is likely a scam.
Use Secure Storage
Store crypto in cold wallets (hardware wallets) rather than leaving them on exchanges.
Enable Two-Factor Authentication (2FA)
Strengthen your security by activating 2FA on all exchange and wallet accounts.
Stay Updated on Scam Trends
Follow trusted news sources like Blockchain Insight, CoinDesk, and Decrypt for the latest crypto scam warnings.
Final Thoughts
The rise of cryptocurrency scams highlights the importance of vigilance and education. As scammers develop more sophisticated tactics, investors must stay informed and take extra precautions to protect their digital assets.
If something sounds too good to be true, it probably is.
If you think you might have been the victim of a cryptocurrency scam, don’t hesitate to reach out to Blockchain Insight. We specialise in crypto fraud investigations and can provide expert guidance on your next steps. Whether you need help tracing lost funds, reporting the fraud, or understanding your legal options, we’re here to assist. Contact us today for a consultation call to see how we can help you recover and protect yourself from future scams.