How to Spot a Crypto Scam: Seven Red Flags

In short: crypto payments are typically irreversible and carry no card-style legal protections, so a scammer who gets your coins is very unlikely to give them back. Knowing the patterns is your best defence.

Why crypto is attractive to scammers

The US Federal Trade Commission (FTC) explains that crypto payments do not come with the legal protections of credit or debit cards and typically cannot be reversed. If a wallet is compromised or you send funds to the wrong person, "no one can step in" to help recover them, and crypto held in accounts is not insured by a government the way bank deposits are. (The FTC page is dated May 2022 and is US-focused, but the patterns it describes are common worldwide.)

For a recent measure of the scale, the FBI's 2025 Internet Crime Report counted 181,565 complaints that reference cryptocurrency, with $11.366 billion in reported losses (up 22% from 2024). Total reported losses across all internet-crime complaints were $20.877 billion. These are complaints reported to the FBI, most of them from the United States. AARP's summary notes that fraud often goes unreported, so the true toll is likely higher.

Seven red flags

• Red flag 1: demands for payment in crypto. The FTC says no legitimate business or government agency will demand you send cryptocurrency, whether to buy something or to "protect" your money.
• Red flag 2: guaranteed or "zero risk" profits. Promises of big returns are a scam signal. Celebrity endorsements and glowing testimonials are easily faked.
• Red flag 3: unsolicited "investment managers". A stranger who offers to grow your money if you transfer crypto into their platform may show you a convincing but fake site where withdrawals are blocked or cost high fees.
• Red flag 4: romance plus investing. If someone you met on a dating app or site offers investment advice or asks for crypto, the FTC says it is a scam.
• Red flag 5: impersonation. Scammers pose as banks, big companies, government agencies or utilities and say you must buy crypto to fix a problem. Never click links in unexpected messages. Some scammers stay on the phone while directing victims to a crypto ATM.
• Red flag 6: fake giveaways and "free money". The FTC says free-money promises are always fake, including offers from supposed celebrities to multiply coins you send.
• Red flag 7: pay-to-work "jobs". Any job that requires an upfront fee, or asks you to buy crypto as part of the role, is a scam.

Simple habits that help

Research first: search for the company or coin name plus words like "review," "scam," or "complaint." The FTC notes that a real new coin from an established company would be widely reported by established media. Ask how the investment works, because honest advisers explain where your money goes while scammers make big claims without details. Slow down, since urgency is a common pressure tactic (general advice; not from the FTC page). Never share seed phrases or passwords (also general best practice).

If it happens to you

Act quickly. The FTC lists reporting channels in the United States, including ReportFraud.ftc.gov, the CFTC, the SEC and the Internet Crime Complaint Center (IC3), and also advises contacting the crypto exchange you used to send the money. Readers elsewhere should contact their local police, financial regulator or consumer-protection agency.

This article is for general education and is not financial or legal advice.

Sources

• US Federal Trade Commission, What To Know About Cryptocurrency and Scams (May 2022)
• FBI Internet Crime Complaint Center, 2025 Internet Crime Report
• AARP, FBI report: $20.9 billion lost to internet crimes in 2025 (April 16, 2026)