Cryptocurrency Scams Are Exploding: Are You The Next Victim?

Cryptocurrencies were once hailed as the future of finance, offering freedom from traditional banks and middlemen. But as digital coins like Bitcoin, Ethereum, and Tether grew in popularity, so too did the scams that came with them. Today, fraudsters are finding new ways to exploit eager investors on both sides of the Atlantic.

In the United States, cryptocurrencies accounted for 26 percent of fraud losses in 2024, compared with just nine percent in 2020, according to the Federal Trade Commission. The FBI estimates that its January 2024 operation alone prevented losses of more than $400 million.

Europe is no safer. Europol says crypto trading is now the main playground for scammers, while France's financial watchdog AMF notes that young people-particularly 18 to 34 year olds-are the most frequent victims.

Social Media: A Hunting Ground for Scammers

Much of this wave of fraud begins on platforms that many people use daily: social media. Fake trading platforms are promoted through posts, ads, or even personal messages, luring victims into what they believe is a promising investment opportunity.

“The AMF pointed to a high concentration of crypto in trading scams since 2023, which it says usually involve social networks directing victims to fake trading platforms,” the report highlights.

This blend of social engineering and digital marketing has proven devastating, often leaving victims not only financially ruined but also deeply shaken emotionally.

'Pig Butchering': When Fraud Meets Fake Romance

Among the most insidious schemes is one chillingly known as“pig butchering.”

Fraudsters create fake online personas-often posing as glamorous influencers or seductive crypto traders-to lure unsuspecting men into digital relationships. Over time, they gain trust, weaving together a false romance while quietly steering victims toward bogus investments.

“Excited by the prospect of fast profits, the victims fall into the trap without checking out the reliability of the sites they are being directed to, losing hundreds or even millions of euros,” explained Margaux Frisque, a lawyer at d & a partners.

The term itself is telling: scammers“fatten up” their victims with promises of wealth before finally“butchering” them by draining their funds. The financial losses are devastating, but survivors also describe deep emotional scars.

To soften the stigma for victims, Interpol has shifted terminology, referring to the practice as“romance baiting.”

'Rug Pulls': When the Ground Disappears Beneath Investors

Another widespread scam is the rug pull. Here, developers launch seemingly legitimate crypto projects, attracting large sums from hopeful investors. Then, without warning, they vanish-taking the money with them.

“These scams mainly take place in decentralised finance, in the absence of middle men,” explained Sonia Rogez, a lawyer at HSF Kramer.

The most notorious examples came in 2021. One involved Squidcoin, a token inspired by Netflix's hit show Squid Game. When its creators executed a mass sell-off, investors collectively lost between $2.5 million and $3.5 million. Another rug pull saw the disappearance of funds-about $2.7 million-earmarked for a virtual fighting game based on ape-themed NFTs.

Some scams are more patient. Rather than disappearing overnight, developers manipulate smart contracts-computer code meant to guarantee trust-slowly siphoning funds away from unsuspecting investors.

Pump-and-Dump: An Old Scam in a New World

Not all fraud comes from shadowy developers. Pump-and-dump schemes are open to anyone willing to manipulate market enthusiasm. The strategy is simple: hype up a speculative token, inflate its price, and then sell off holdings in a coordinated dump-leaving small investors with worthless coins.

Often involving so-called“meme coins”, these scams echo the penny stock manipulations of the past. Regulators once curbed such practices in traditional finance, but in the crypto world, where the blockchain replaces middlemen, oversight is harder to enforce.

Staying Safe: Awareness as the Only Shield

For all the promise of cryptocurrencies, the risks are equally real. Fraud thrives on inexperience, overconfidence, and the allure of easy money.

Frisque, the lawyer, puts it bluntly: investors must be on“maximum alert” and remain“ultra informed, ultra prepared and ultra meticulous, because one is one's own bank.”

Her warning is clear-there are no safety nets in this new financial frontier.

A Cautionary Tale for the Digital Era

The rise of cryptocurrency scams is more than a story of numbers and losses. It is about individuals-often young, often tech-savvy-who are left with empty bank accounts and broken trust.

As regulators and law enforcement agencies scramble to keep pace, the responsibility also falls on individuals to question, research, and verify before clicking on that next big“opportunity.”

The promise of digital wealth remains-but so does the shadow of fraud that follows close behind.

(With inputs from AFP)

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