Crypto investment fraud cost Americans $3.96 billion in 2023 — more than any other fraud category. The scams come in two flavors: fake investment platforms that show you fake gains until you try to withdraw, and 'pump and dump' schemes where influencers hype a new token before selling their holdings.
The fake platform scam (often called pig butchering): you're introduced to a trading platform, usually through a romantic or social connection. You make a small deposit. The platform shows impressive gains. You invest more. When you try to withdraw, there are fees — tax requirements, verification fees, 'withdrawal insurance.' These fees are simply additional theft. The platform is entirely fake.
How to spot a fake crypto platform: it's not listed on CoinMarketCap or CoinGecko; the withdrawal process is consistently blocked by new requirements; customer support exists only via chat and is always pushing you to deposit more; the platform was only recently registered.
Check the seller and product through the appropriate regulator’s official lookup tools, matching identity and contact details. An EDGAR filing does not establish registration, approval or safety. Check if the person pitching it is a registered investment advisor. Search the platform name plus 'scam' or 'review' before depositing a single dollar.
If you've already sent money to a suspected fake platform: stop immediately. Do not send more to 'unlock' your funds — this is a secondary theft. Report to the FTC (reportfraud.ftc.gov) and FBI (ic3.gov). Contact your bank about any wire transfers. Recovery is difficult but reporting helps shut operations down.
Sources for this correction, checked October 17, 2026: https://www.investor.gov/protect-your-investments/fraud/types-fraud/false-claims-sec-registration