Fraud in this market is not technically sophisticated. It relies on irreversible payments, a market where extraordinary returns are plausible enough not to trigger suspicion, and counterparties who are hard to identify. The same handful of patterns recur, and knowing their shape is worth more than knowing any particular scheme's name.
The largest category by losses is the long-form investment fraud sometimes called pig butchering. Contact begins socially — a wrong-number message, a dating app, a professional networking request — and develops over weeks into a friendship. Investment is introduced late, through a platform that looks entirely convincing and shows steady profits. Small withdrawals succeed, which is what secures trust. Larger ones trigger demands for tax or unlocking fees, and the money was never invested. The tell is not the platform, which will look flawless. It is that the relationship arrived unsolicited and the investment opportunity followed it.
Impersonation is the second category. Support staff who contact you first, exchange representatives who ask for a seed phrase, giveaway announcements from a copied account, wallet-recovery services promising to retrieve stolen funds. All of these invert a normal process: legitimate support responds to tickets you opened, no legitimate service needs your seed phrase, and nobody can reverse a blockchain transfer, so a recovery service is a second theft from the same victim.
The third is the fake or manipulated asset — a token with a contract that prevents selling, a project whose team cannot be identified, a coin promoted by paid accounts into an illiquid pool. These are covered in more detail in our pieces on rug pulls and on researching a cryptocurrency, and the common thread is that the promotion is loud while the verifiable facts are absent.
The checks that catch nearly all of it are unexciting. Is the firm registered with the relevant regulator, checked on the regulator's own register rather than on a page the firm linked to? Does the promised return come with any explanation of where it comes from, and does that explanation survive a second question? Is there pressure to act quickly, or discomfort when you say you will think about it? Are you being asked to pay a fee to release money that is supposedly already yours — the single most reliable indicator that no money exists? And can you find the entity outside the material they sent you?
Two rules cover the rest. Nobody legitimate needs your seed phrase or your exchange API keys, ever, for any reason. And a guaranteed return in a market this volatile is not an ambitious promise but a false one — the guarantee is the fraud, whatever surrounds it. If money has already gone, report it to your national police and financial regulator and to the exchange that received it: funds are occasionally frozen when reports arrive quickly, and it is the only mechanism that has ever recovered anything.