Crypto Fraud

Financial fraud is the most frequent crime in the UK and crypto currency fraud is the fastest growing area of financial crime. It is robbing people of a lifetime of savings and the problem has been getting much worse recently.

Q: What is crypto fraud?

In essence this is really old-fashioned scams dressed up in modern crypto clothing — fake investments, fake platforms, fake promises.

Crypto fraud is any scam that uses digital currencies—like Bitcoin or Ethereum—as the hook. Criminals exploit the complexity and hype around crypto to steal money, often by pretending to offer investments, secure wallets, or trading platforms. The tactics are old-fashioned fraud; the packaging is new.

Q: Why is crypto such a magnet for scammers?

·      It’s confusing — most people don’t fully understand it, so scammers can baffle with jargon.

·      It’s unregulated — fewer protections than banks or mainstream investments.

·      It’s irreversible — once you’ve sent crypto, there’s usually no way to get it back.

Crypto is also appealing to many people because of the gains it has made. Although it has been on a rollercoaster ride – and there are dramatic life changing losses, there have also been big gains. It has risen over 400% in 5 years. So you can see why people are interested and why it is a magnet for criminals.

Q: What are the most common types of crypto scams right now?

• Fake investment platforms: promises of high returns, slick websites, but no real trading behind the scenes.

• Celebrity deepfake endorsements “promoting” crypto schemes which are fake.

• Romance scams build trust over weeks, then persuade victims to invest in fake crypto sites.

• Recovery scams: targeting victims a second time by claiming they can “unlock” lost crypto for a fee.

Q: Is there a measure of how much worse it is getting?

Crypto-related scams jumped by 16% last year.

Data from Action Fraud reveals that people aged 35-44 were more likely to be targeted for investment fraud, while those aged 55-64 suffered the greatest financial losses.

Not only has the number of frauds risen – the amount the fraudsters are stealing has gone through the roof.

The amount of money lost to general investment scams by UK consumers has leapt 55% in a year as cryptocurrency fraudsters intensify their efforts to cheat people out of their savings, data shows.

Official UK banking industry data shows that in the first six months of this year compared with last year, investment scam losses surged, reaching £97.7m during the period – more than £500,000 a day.

Q: How does it work?

It often starts by clicking on a social media advert or news alert. This typically is a tip for a supposedly lucrative crypto investment.

Investors often hand over a relatively small sum at first, a couple of hundred pounds, – and the scammers in some circumstances can then use fake software that displays a seemingly live crypto trading screen, they think they are getting rich. Victims typically lose bigger sums trying to cash out, with their “winnings” always blocked by the need for another payment, which might be a broker’s fee or a tax bill.

In March the Guardian reported on a crypto scam operating from the former Soviet state of Georgia that tricked people in the UK out of £9m. Deepfake videos and fictional news reports featuring the likes of the money expert Martin Lewis were used to promote the fake investments.

Q: Are there any examples of some of the biggest fraud schemes?

OneCoin

• OneCoin was promoted as a legitimate new cryptocurrency, with lavish marketing, “education packages,” and promises of big returns. In reality it was a pure pyramid / Ponzi scheme.

• Its founder, Ruja Ignatova (the so-called “Cryptoqueen) held pop concert like meetings such as this at Wembley Arena

• The scheme raised more than US$4 billion from investors worldwide before it collapsed.

• Ignatova boarded a Ryanair flight to Athens on October 25, 2017, and has not been seen since.

• She is on the FBI’s Most Wanted list.

BitConnect

• BitConnect attracted investors with promises of daily returns (thanks, it claimed, to a “trading bot”). It looked successful for a while and many people invested.

• Then it suddenly collapsed — investors lost nearly everything. The platform was later exposed as a Ponzi / lending-platform scam.

• A federal grand jury in San Diego returned an indictment today charging the founder of BitConnect with orchestrating a global Ponzi scheme. BitConnect is an alleged fraudulent cryptocurrency investment platform that reached a peak market capitalization of $3.4 billion.

Recent UK crypto-fraud arrests (2025)

Detectives from the Met Police’s Economic Crime team have arrested five men as part of an ongoing investigation into a large-scale cryptocurrency investment fraud.  It’s believed thousands of victims may have lost in excess of a million pounds.

The Met say: The investigation centres on a sophisticated fraud technique involving several websites that claim to offer pre-sale investment opportunities in new cryptocurrencies.

These new cryptocurrencies are sold with proposed returns in cash that will double or more in value when listed. Except, as the team have found, these websites rarely have any intention to list them on exchange websites, and returns in cash are impossible to guarantee.

Q: Is there a profile of people the fraudster are targeting?

1. 18 to 25 year olds accounted for the highest percentage of reports (11 per cent) and over half (52 per cent) of victims were aged 18 to 45 years old. Crypto-fraud victims are typically younger and middle-aged, not pensioners. This is different from, say, impersonation fraud or pension fraud, where older groups are more affected.

2.     Many are tech-comfortable but not crypto-expert. So they are used to doing things online and therefore are not suspicious of dealing over the Internet.

3.     People actively looking for high returns or alternative investments. Scammers specifically target people who are searching Google or TikTok for “best crypto to buy,” “how to invest,” “passive income,” “make money online”. They may have joined Facebook crypto groups, clicking on ads promising 10–30% monthly returns

4.     People who respond to online ads or social-media influencers

5.     They are often people under financial pressure or looking for a boost to get them out of trouble.  Scammers deliberately use emotional triggers like:

“You don’t want to miss this chance.”“This could double your savings in 3 months.”“Let me help you reach your goals.”

Q: What is the advice on how best to protect yourself?

Action Fraud says:

Fraudsters will cold call victims and use social media platforms to advertise ‘get rich quick’ investments in mining and trading in cryptocurrencies such as Bitcoin.Fraudsters will convince victims to sign up to cryptocurrency investment websites and to part with their personal details such as credit card details and driving licences to open a trading account. The victim will then make an initial minimum deposit, after which the fraudster will call them to persuade them to invest again in order to achieve a greater profit.In some cases, victims have realised that they have been defrauded, but only after the website has been deactivated and the suspects can no longer be contacted.How to protect yourself• Don’t assume it’s real – professional-looking websites, adverts or social media posts don’t always mean that an investment opportunity is genuine. Criminals can use the names of well-known brands or individuals to make their scams appear legitimate. • Don’t be rushed or pressured into making a decision – a genuine bank or financial organisation won’t force you to part with your money on the spot. Always be wary if you’re pressured to invest quickly or promised returns that sound too good to be true. • Stay in control – avoid uninvited investment offers, especially those over cold calls. If you’re thinking about making an investment, get independent advice and thoroughly research the company first.

Q: What should someone do if they think they're being scammed?

1. Stop sending money immediately.

2. Contact your bank — they may be able to freeze transfers.

3. Report to Action Fraud and tell your local police.

4. Avoid “recovery agents” — they’re almost always scammers too.

5. Keep all screenshots, emails, and messages — useful for investigations.

Q: Can people get their money back?

It’s difficult. Unlike card fraud, there’s no automatic refund. Some banks will reimburse victims of APP (authorised push payment) scams, but crypto transactions themselves cannot be reversed. The best hope is catching the scammer early or the bank stepping in if the money hasn’t yet reached the exchange.

Q. What’s the one piece of advice you’d give?

If anyone contacts you about crypto — WhatsApp messages, Instagram DMs, or “advisers” — assume it is a scam until proven otherwise. Legitimate crypto companies do not cold-contact you.

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