Amid the boom in the cryptocurrency market, the amount of money stolen through cryptocurrency scams has reached new heights, and it is very terrifying.
According to the 2026 Crypto Crime Report published by the blockchain analysis firm Chainalysis, around $17 billion was lost to scams and fraud in 2025 alone.
This sharp rise in the scams mostly comes from scammers who now operate like tech companies, using advanced tools like artificial intelligence, deepfake videos, and professional phishing kits. For example, impersonation scams grew by an unbelievable 1,400% in 1 year.
(Source: Chainalysis)
The report revealed that the average victim now loses around $2,764 per scam, a 253% increase. This proves that scammers are now targeting fewer people but aiming for much larger amounts.
While these scams are on the rise, it is important to identify a scam as it is your most important form of defense. In this blog, you will find out the most common red flags you must know, based on patterns identified by Chainalysis, the FBI’s Internet Crime Complaint Center (IC3), and global consumer protection agencies. Let’s begin.
1. Promise of High Returns, That May Sound Unrealistic
The first and one of the most popular warning signs is a promise of profits that sound too good to be true. Scammers will guarantee specific returns, like 10% to 50% monthly. Sometimes, they promote this kind of fake investment as completely “risk-free.”
Scammers most likely create new tokens with other attractive features, like automated trading bots or exclusive platforms.
But in reality, all legitimate cryptocurrency investments are highly volatile, and no one can give a guarantee of high returns without any loss.
In 2025, schemes known as high-yield investment programs (HYIPs) and fake trading platforms were responsible for massive losses. These generally come with sophisticated but fake dashboards. These fake UIs show you that investment is growing, but it is just a decisive technique used by scammers. This is part of a “rug pull,” where the project’s creator eventually runs away with all the money locked in the project. It might also be part of a “pig butchering” scheme, where victims are slowly fattened up with fake profits before being stolen from.
Chainalysis data shows that these methods created huge inflows of cash to criminal wallets.
How to Avoid:
To avoid this, you must do your own research on any projects that promise high returns. For this, you can use trusted sites like CoinMarketCap or CoinGecko. Also, you must look for projects with smart contracts audited by firms like Certik and PeckShield.
2. Projects Ask for Your Private Keys or Seed Phrase
Like traditional banks’ golden rule, in the cryptocurrency sector, no genuine project or person will ever ask for your secret recovery phrase (seed phrase) or private keys. This data is the absolute master key to your entire wallet. Once you hand it over to a scammer, it will take no time for the scammer to drain your entire crypto wallet.
While the base of this technique is still the same, scammers use different methods to steal this information. One of the popular methods is a phishing attack, where fake emails pretend to be from companies like Coinbase or MetaMask. In this, scammers trick users into entering their details on copycat websites.
In 2025, “wallet drainer” malware and a QR code that secretly grants a smart contract unlimited permission to withdraw funds from their wallet. The FBI IC3 reports show that these tactics lead to total theft.
How to Avoid:
In any condition, do not share your private keys and seed phrases with anyone. Also, do not click on any random links, as it might lead you to fake websites.
3. FOMO Tactics
Scammers are experts at creating panic or fear of missing out (FOMO). To do so, they use phrases like “limited time offer,” “last chance,” “your account is compromised”, etc.
These pressure techniques are created to short-circuit your logical thinking and make you act without verifying the facts.
In this, a scammer will pretend to be customer support from a real exchange, a government authority like the FBI, or others. They demand quick action to “protect” your assets.
How to Avoid:
Do not take quick action when it comes to your hard-earned money. Instead, you should first contact the real organization to cross-verify.
4. Unsolicited Contact
There are new types of scams, where a random friendly message pops up on your screen. For example, a stranger contacts you on a dating app, social media platform, WhatsApp, or Telegram.
Over weeks or even months, they develop a relationship and build trust. This process is known as “pig butchering,” where the victim is “fattened up” emotionally before the financial slaughter.
Once they create a strong bond, they play their cards and introduce an exclusive investment opportunity on a random platform.
How to Avoid:
Do not fall for unsolicited investment schemes from people you meet online.
5. Lack of Transparency
One of the biggest red flags is a lack of transparency, where projects have an anonymous development team, no verifiable information about their founders, or fake advertisements from celebrities. These kinds of scammers use AI-generated deepfake videos of figures like Elon Musk or fake tweets to promote “giveaways” where you send crypto first with a promise to receive more back.
Apart from this, other warning signs include platforms that promise impossible features or claim to be “fully regulated” without any proof.
How to Avoid:
To verify this, you must look for projects where the team is publicly known, with LinkedIn or GitHub profiles.
Final Words
At present, the cumulative market capitalization is around $3 trillion, according to CoinMarketCap. However, the crypto sector is still going through its trial-and-error phase, and it is important for users to take their safety into their hands. From time to time, scammers test new decisive techniques to steal your hard-earned money.
If you are scammed, you must reach out to the local authority, or you can report it to the FTC at Reportfraud.ftc.gov. Also, you can avoid such crypto scams with little awareness.
Also Read: Proof of Work vs. Proof of Stake: How Crypto Networks Stay Secure
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