FROM FTC.GOV - 3 August 2026
Cryptocurrency has become a popular way to invest, but its growing popularity has also created new opportunities for scammers.
These scams often use professional-looking websites, fabricated account balances, and convincing conversations to appear legitimate. Understanding how these scams operate, and the warning signs to watch for, can help you recognize suspicious activity before sending money or cryptocurrency.
What Is a Cryptocurrency Investment Scam?
Before you can understand a cryptocurrency investment scam, you need to know about cryptocurrency. Cryptocurrency, often called crypto, is a type of digital currency that can be bought, sold, and transferred online. Bitcoin and Ethereum are two well-known cryptocurrencies. People typically purchase cryptocurrency through exchanges and store it in digital wallets.
Scammers exploit this process by manipulating victims into transferring cryptocurrency into wallets or platforms that they control.
A cryptocurrency investment scam begins with a fake investment opportunity, advertisement, or unsolicited message from someone who claims to be an investment expert. The cybercriminals main goal is to manipulate the victim into investing money into a fake cryptocurrency investment opportunity.
Pig Butchering Scams
Unlike regular cryptocurrency investment scams, pig butchering scams are not defined by the cryptocurrency itself. They are defined by the relationship-building and long-term manipulation tactics used before the investment fraud occurs. A pig butchering scam is a type of cryptocurrency investment scam in which scammers spend weeks or even months building trust through fake romantic relationships or friendships before introducing a fraudulent investment opportunity.
As the fake investment appears to grow, the scammer encourages larger deposits and persuades the victim to use savings, retirement funds, or borrowed money. If the victim tries to withdraw their funds, the scammer or fraudulent platform demands additional payments to access the investment.
The scam typically ends when the victim can no longer send money or begins questioning the investment. At that point, the scammer cuts off contact or disappears, leaving the victim without access to their funds.
How Do Cryptocurrency Investment Scams Work?
Although every scam is different, many follow a similar pattern:
Building Trust
The scam typically begins with an unexpected message on social media, a dating app, a messaging platform, or even a wrong number text message. Rather than asking for money immediately, the scammer spends time building trust through regular conversations and shared interests.
Once a relationship has been established, investment recommendations seem more credible because they come from someone who appears to be genuine.
Introducing the Investment
After trust has been established, the scammer introduces cryptocurrency as an investment opportunity. They claim they have earned significant profits or learned a successful strategy from a friend, family member, or financial expert.
To make their story more convincing, scammers show photos or videos of expensive cars, luxury homes, designer items, or an extravagant lifestyle. These displays of wealth are used to create an illusion that their investment strategy is successful, and to encourage victims that they too can achieve the same results.
They offer to guide you through the process, making the investment feel like helpful advice rather than a sales pitch.
Creating the Illusion of Success
The scammer then directs you to a website or app that appears to be a legitimate platform. After transferring cryptocurrency, the platform displays impressive returns.
These profits are fabricated. The website is designed to convince you that your investment is growing in order to encourage you to deposit more money.
Preventing Withdrawals
Many people realize something is wrong only after trying to withdraw their funds. The platform claims you must first pay taxes, processing fees, security deposits, or verification charges before your money can be released.
These additional payments are part of the scam. Even if paid, funds may never be recovered.
Warning Signs of a Cryptocurrency Investment Scam
While no single warning sign guarantees an investment is fraudulent, multiple warning signs appearing together should be treated as a reason to slow down and investigate further. Some common warning signs include:
- Someone you recently met online begins discussing cryptocurrency investments.
- You’re encouraged to use an unfamiliar investment website or app.
- The investment promises guaranteed or unusually high returns.
- There’s pressure to invest more money or act quickly.
- You’re discouraged from discussing the investment with friends or family.
- You’re instructed to move conversations from a dating app or social media to an encrypted messaging app.
What Should You Do If You Suspect a Scam?
If you believe you may be involved in a cryptocurrency investment scam:
- Stop sending money or cryptocurrency immediately. Do not pay additional fees to unlock your account or release profits.
- Save any evidence related to the investment, including website addresses, cryptocurrency wallet addresses, transaction records, screenshots, emails, text messages, usernames, and payment information.
- Use this evidence to report the fraud to your local law enforcement agency and the FBI’s Internet Crime Complaint Center (IC3).
- If you purchased cryptocurrency through a legitimate exchange, contact the exchange as soon as possible to report the fraud.
Final Thoughts
Cryptocurrency scams continue to evolve, making them increasingly more difficult to recognize. Understanding how these scams operate and knowing the warning signs can help you make informed decisions before investing in cryptocurrency.
Legitimate investment opportunities should be able to withstand questions, research and verification. If someone pressures you to act quickly or discourages you from doing your own research, that’s a red flag.