How cryptocurrency scams work

  • The hook: You see an enticing ad on social media. Cryptocurrency scam adverts can be very slick. They might promise a "new investment opportunity" stating a temptingly high return. The ad will have lots of positive comments on it, it may even have influencer endorsements, or deepfake videos.
  • Fake growth: You invest, perhaps even cautiously, and see your balance rise on their platform. In some cases, your trusted portfolio manager assures you that your funds are growing. But the figures aren't real. Fraudsters can create fake platforms or inflate returns to encourage you to invest more of your money.
  • Sense of trust: Fraudsters may pressure or coach you to hide the true reason for their transactions, claiming it's for a legitimate purpose or investment. If you're asked to keep your payments a secret or mislead your bank when questioned, it's almost certainly a scam. 

    No genuine company or investment will ever ask you to hide the truth from your bank. Unregistered crypto investments or "too good to be true" offers are often fraudulent, and you could lose all your money or even become involved in criminal activity.
  • Cash-out fails: You may test your suspicions about being too good to be true by taking out a sum of money. This may work the first, or even the second time. This is designed to draw you into false confidence and encourage you to invest more. But when you try to withdraw the larger sums of money, excuses begin: technical issues, fee requests, unsupported networks.
  • Funds are lost: Unfortunately, you lose your money, and may even be asked to send more money for fees in order to regain your investment. In most cases, there is little chance of your money being recovered.

What is crypto?

Cryptocurrency is a form of digital money created from a code. An encrypted string of data is coded to signify one unit of currency. You’ve probably heard of Bitcoin, but that’s one example from a long list of different cryptocurrencies and cryptoassets. ‘Cryptoasset’ is the broader term that includes other products, as well as cryptocurrency. We’ll use “crypto” as shorthand for cryptoassets, including cryptocurrency, in this article.

The thing is, cryptocurrency isn’t underpinned by any other currency or asset, so it’s not formally considered to be currency or money. Cryptocurrency is not backed by a central bank or other authority and is not monitored by the government. Instead, the cryptocurrency economy is monitored by the community using cryptocurrency online.

Because it’s not regulated in the same way as other currencies or assets, organised criminals will often use crypto to launder the proceeds of crime, or to fund crimes and terrorist activity. There is also evidence of cryptoassets being used by terrorist organisations to make anonymous payments.

The impact

Cryptocurrency scams are very hard - near impossible - to recover funds from, as money is often moved to untraceable crypto wallets immediately. They can leave you severely out of pocket, and can have a very real emotional impact too. You might be left feeling frustrated, anxious, overwhelmed or scared that you'll lose more money.

Tips to protect yourself

  • Check the Financial Conduct Authority Register FCA authorisation before investing
    Before you part with any money, check whether the investment firm or advisor is authorised by the Financial Conduct Authority (FCA). This means they meet recognised standards and are accountable. You can search for them on the FCA register using their name or reference number. Don't rely on links provided in emails or adverts. If you deal with a firm (or individual) that isn't regulated, you may not be covered by the Financial Ombudsman Service (FOS) if things go wrong and you lose your money.
  • Be wary of online adverts of links to investment opportunities - search independently
    If you see a tempting investment offer on social media or in an email, don't click straight through. Fraudsters can sometimes create fake webpages which clone genuine investment companies. Instead, take a moment to search for the company or opportunity independently using a trusted browser.
  • Talk it through with someone impartial before committing
    Fraudsters often count on people making quick decisions. Before you invest, pause and talk it over with someone you trust, like a friend, family member or an authorised financial adviser. A second opinion can help you spot any red flags you may have missed, especially if the opportunity feels time-sensitive.
  • Treat online reviews with scepticism as they can be fake
    Scam sites are often filled with glowing five-star reviews, comments and 'success stories'. But these can easily be faked using bots or paid actors. Be cautious, especially if all the reviews are overly positive or use similar language. Look for detailed, balanced feedback rather than just high ratings.
  • Use trusted comparison platforms like Trustpilot
    If you want to check how a company has been rated by others, use established review platforms such as Trustpilot or Which? These services take steps to verify reviews and flag suspicious patterns. They're not foolproof, but are far more reliable than comments you'll see on social media or the company's own website.
  • Report suspicious messages
    If you spot a scam, do not click the link in the message, and do not install any apps if prompted. Forward the message to 7726, a free spam-reporting service provided by phone operators. Your action could protect others too.
“These scams falsely promise high yields or returns, so it's easy to see why people are tempted by them. But if it sounds too good to be true, it typically is.”

Triodos Bank Financial Crime Risk Team

A case study

Tom found himself in financial difficulties and needed to find extra money fast. He saw a social media post for a new investment opportunity that promised high returns. He was even contacted by an employee of the investment company who advised him to set up a cryptocurrency account and provided him with a link to access his account. He invested a small amount and watched his money go up on his new account. Now feeling confident, he put all of his savings into the fake crypto account hoping to make a good return. When he tried to remove money again, he was told that he would have to pay a large fee to access his money. The 'employee' he had been speaking to also stopped responding. He never got his money back.

If you've been affected

  • If you think you have been a victim of fraud and your Triodos bank account details have been compromised, please contact us on 0330 355 0355. Further information on reporting fraud can be found on our support page
  • Report it to Action Fraud or Police Scotland to help prevent future scams
  • Beware of "recovery agents" who promise to help recover your money for a fee, as these are also often scams
  • If you've been affected by crime, Victim Support offer to help move forward. Their services are free, confidential and available to anyone in England and Wales, regardless of whether the crime has been reported or how long ago it happened. Call their support line on 08 08 16 89 111 or request support online. If you live in Scotland, you can call 0345 603 9213 or visit their website for more information.