How to Spot a Crypto Scam: 12 Red Flags

How to spot a crypto scam before you send a cent: 12 red flags drawn from FBI, FTC, SEC and FCA warnings, a four-flag stop rule, and what to do next.

How big is the crypto scam problem?

Big enough that it now dominates reported online fraud. In its 2025 annual report, the FBI’s Internet Crime Complaint Center (IC3) received 1,008,597 complaints with $20.877 billion in reported losses. Complaints with a cryptocurrency link numbered 181,565 and accounted for $11.366 billion, or 54.4% of all reported losses.

A few more figures from the same report show who gets hurt and how:

• Investment fraud leads everything. The IC3 calls cryptocurrency investment fraud “the highest source of financial losses to Americans in 2025.”
• Older adults are hit hard. People aged 60 and over reported $4.35 billion in crypto-related losses, 38.2% of the crypto total.
• Crypto ATMs are a growing channel. Complaints involving crypto ATMs or kiosks numbered 13,460, with $389 million in losses, roughly $28,900 per complaint.

These are only the losses people chose to report. The good news is that scams change their costumes far more often than their methods. Learn the 12 red flags below and you’ll recognize most schemes before any money moves.

The fastest check: four flags that end the conversation

Some warning signs call for careful thought. These four don’t. If any one appears, stop: no further research is needed.

1. Someone asks for your recovery phrase, private key or remote access to your device.
2. You must pay a fee, tax or deposit before you can withdraw.
3. Returns are promised as fixed, high or risk-free.
4. You are asked to send crypto so you can receive more back.

Our crypto scam risk checker treats each of these as critical for the same reason: no legitimate business needs any of them from you.

The 12 red flags of a crypto scam

1. Promised returns, or returns that never wobble

The FTC puts it bluntly: “Only scammers will guarantee profits or big returns.” The SEC’s Investor.gov adds a subtler version: be skeptical of any investment that “regularly generates positive returns regardless of overall market conditions.”

The math shows why. A “modest” 1% a day compounds to about 37.8 times your money in a year: $1,000 would become roughly $37,783. At 1.5% a day it is about 229 times, and at 2% a day about 1,377 times, turning $1,000 into $1.38 million.

No real market pays that, which is why fixed daily yields are a hallmark of Ponzi-style schemes that pay old investors with new investors’ money. Our guide to guaranteed-yield crypto schemes breaks down how they collapse.

2. Anyone asks for your recovery phrase or screen access

Your recovery phrase is your wallet. Whoever has it can take everything, from anywhere, without asking you again. No exchange, wallet maker, support agent, “validator” or website needs it, and no legitimate helper needs remote control of your screen. Requests usually arrive dressed as help: a support account in your DMs, a “wallet sync” form, a security alert. See fake crypto support scams and our rules for storing a recovery phrase safely.

3. A stranger’s friendly chat turns to investing

A wrong-number text, a dating match or a social media contact becomes a warm, patient friendship. Weeks later, they mention a trading platform that has made them rich. The FTC’s rule is simple: “Never mix online dating and investment advice.” The FCA notes that scammers “often try to build a friendship.” This is the pattern behind pig butchering scams, which can run for months before the ask.

4. Pressure, urgency and “exclusive” offers

Scammers need you to act before you think. The FCA’s checklist asks: do you feel pressured to act quickly, and is the offer “exclusively for you”? Countdown timers, bonuses for depositing today and claims that only a few spots remain are all designed to cut your thinking time. A decision rule that costs nothing: any real opportunity will still exist after a 24-hour pause and a conversation with someone you trust.

5. “Send crypto, get double back”

The FTC describes scammers who pretend to be a celebrity “who can multiply any cryptocurrency you send them.” These giveaways typically borrow a real celebrity’s or company’s name and image. No one gives away money in exchange for your money. Our guide to crypto giveaway scams shows the common formats.

6. You have to pay before you can withdraw

According to the FTC, victims who log in to their “investment account” find they can’t withdraw at all, “or only if you pay high fees.” Investor.gov lists difficulty cashing out as a core fraud warning. On a scam platform, the balance on screen is just a number the operator types in. Any “tax”, “verification fee” or “unlock deposit” is a new loss, never a key to the old money.

7. Impersonation of a company, celebrity or government agency

Scammers pose as exchanges, tech firms, banks and government agencies. The FTC warns of callers who tell you to “protect” your money by buying crypto and sending it to a wallet address they provide “for safe keeping.” In the IC3’s 2025 data, crypto-linked tech and customer support fraud cost $1.23 billion and government impersonation $281 million. More on these tactics in impersonation scams on social media and Telegram.

8. Payment demanded in crypto, at a crypto ATM or by QR code

“Only scammers demand payment in cryptocurrency,” says the FTC, which also describes scammers staying on the phone while walking victims through feeding cash into a crypto ATM and scanning a QR code that sends the coins straight to the scammer. Real bills, fines and employers don’t work this way. Job and task offers that ask you to deposit crypto are a variant; crypto-linked employment fraud cost $288 million in 2025, per the IC3. See job and task scams.

9. Free tokens that require you to connect or sign

Unexpected tokens appear in your wallet with a website in their name, or a post announces an airdrop with a claim link. The claim page asks you to connect your wallet and approve a transaction or sign a message, which can hand over your tokens. Real airdrops don’t require you to pay upfront or reveal your recovery phrase. See fake crypto airdrops and claim sites and how crypto drainers steal funds.

10. A token you can buy but can’t sell

Some tokens are built so that buyers can’t sell, or so that insiders can pull the liquidity and vanish. Anonymous teams, hype-heavy marketing and pressure to buy before a listing are common companions. Two guides cover the specifics: honeypot tokens and rug pull warning signs.

11. Unregistered platforms, secret strategies and miracle bots

Investor.gov flags unregistered investments, unlicensed sellers and “secretive, complex strategies,” advising you to avoid investments you “don’t understand” or “can’t get complete information about.” A trading bot or signal group that can’t explain where returns come from belongs in this category; see fake crypto trading bots. Before using any platform, check whether it is registered with your national regulator. In the UK, the FCA encourages people to use its Firm Checker.

12. Offers to recover your lost crypto

After a loss, some victims are contacted by people who claim they can trace and return the funds, for a fee. The IC3’s advice: “Be wary of cryptocurrency recovery services, especially those charging an up-front fee.” Why that offer is almost always a second scam is explained in crypto recovery scams.

The 12 red flags at a glance

A worked example: scoring one message

Example: “Hi, is this Daniel? Sorry, wrong number! Since we’re chatting, my uncle runs a platform paying a steady 1.5% a day, basically risk-free. Deposit today and you get a 20% bonus. Withdrawals just need a small verification fee.”

Count the flags. The contact is unsolicited and drifting toward investing (flag 3). The returns are fixed and “risk-free” (flag 1), a critical flag on its own. The same-day bonus is pressure (flag 4).

The withdrawal fee (flag 6) is a second critical flag, which makes four red flags in all, two of them critical. The verdict takes seconds: stop replying, don’t click anything, and report the number. The 1.5% daily promise alone implies about 229 times your money in a year, which is the arithmetic of a fraud, not an investment.

Why these scams work on smart people

Scams don’t succeed because victims are foolish. They succeed because they are engineered around normal human reactions. The FCA’s list of warning signs reads like a map of those levers: being told an offer is exclusively for you, flattery and friendship, feeling worried or excited, and someone “speaking with authority.”

Three patterns show up again and again:

• Trust before the ask. Relationship scams can spend weeks on friendly conversation before money comes up, so questioning the offer feels like questioning a friend.
• Proof that isn’t proof. A dashboard full of profits, or a small early withdrawal that really works, makes a platform feel tested. Both cost the scammer almost nothing.
• Sunk cost. Once money is in, a fee to withdraw feels like the price of getting it back. In reality it is the next loss.

Knowing the script is your best defense. When you notice an emotion being used to hurry you, count that as a red flag in its own right.

Common mistakes when checking an offer

• Trusting a small withdrawal. A scam platform can let you withdraw a little early on. It costs the operator little and builds trust before larger deposits.
• Trusting endorsements. The FTC notes that celebrity endorsements and testimonials “are easily faked.”
• Checking the name, not the address. A lookalike domain or app can carry the real company’s name and logo.
• Asking the suspect. A scammer will always say it’s legitimate. Verify through sources you find yourself.

What to do if you spot red flags

1. Stop sending money, including any fee that supposedly releases your balance.
2. Save evidence: screenshots, usernames, website addresses, wallet addresses, transaction hashes, dates and amounts.
3. Contact your exchange or bank through its official app or website as soon as possible.
4. Report it. The FTC lists ReportFraud.ftc.gov and the FBI’s ic3.gov for US victims, along with the SEC, the CFTC and the exchange you used. Outside the US, use your national fraud reporting service or the police; our guide on how to report a crypto scam lists the current services by country.

The bottom line

Crypto-linked fraud accounted for $11.366 billion in losses reported to the FBI in 2025, yet it relies on a short list of tricks. If anyone asks for your recovery phrase, charges a fee to withdraw, promises fixed high returns or wants crypto sent to get more back, stop immediately. For everything else, slow down, verify independently and report what you find.

This content is for education only and is not financial, investment, tax or legal advice. Crypto assets are volatile and you can lose money. Examples use hypothetical numbers. See our disclaimer and editorial policy.