In this article · 8 sections
- 01The short answer — the platform is the trap
- 1. Pig butchering — the long con
- 2. Fake exchanges and fake trading apps
- 3. Wallet drainers — one signature empties the wallet
- 4. Address poisoning — the copy-paste trap
- 5. Recovery scams — the second hit
- 07If it already happened — what to do now
- 08Talking to someone you think is being scammed
Most people who lose money to crypto fraud were not hacked. They were persuaded: a friendly stranger, a professional-looking trading app, a 'fee' to unlock a withdrawal that never comes. These scams follow scripts, and once you know the script, it is much easier to stop at the first step. This guide explains how the five most common crypto scams work, the warning signs at each stage, and where victims can report. There is nothing to buy on this page. Not financial or legal advice.
The short answer — the platform is the trap
In the biggest losses, the victim usually does send money to a real-looking app or website, sees a balance grow, and then cannot withdraw. The balance was never real. Three rules stop almost every scheme below: never deposit on a platform someone you met online recommended; check the company on the regulator's own public register, reached by typing the regulator's address yourself; and treat any 'fee', 'tax' or 'deposit' demanded to release your money as proof of fraud.
1. Pig butchering — the long con
The name comes from the scammers themselves: the victim is 'fattened' with attention before being 'slaughtered'. It usually starts with a wrong-number text, a dating match or a social media message. Weeks of friendly conversation follow, sometimes romantic, often with photos of a comfortable life. Then the contact mentions a trading strategy that works for them and offers to show you.
You are guided to a specific app or website. A first small deposit appears to grow quickly, and an early small withdrawal may even work, to build trust. You are then encouraged to deposit much more. When you try to withdraw a large amount, you are told to pay a tax, a fee or a 'security deposit' first. Nothing ever comes back. US authorities, including FinCEN, have warned that many of these operations are run from scam compounds whose workers are themselves trafficking victims.
- A stranger who contacted you first and soon talks about investing
- They choose the platform for you, often an app not in the official stores, or a link instead of a known exchange
- Profits that look too steady, and pressure to deposit more before a 'deadline'
- Any payment demanded before you can withdraw
2. Fake exchanges and fake trading apps
Some scams skip the romance and go straight to the platform: ads, deepfake videos of celebrities or politicians, or 'investment groups' on Telegram and WhatsApp promoting a site with copied branding and invented reviews. The site shows a live-looking chart and your growing balance, but it is just a web page. Real exchanges let you withdraw your own funds without paying anything first, and they appear on their regulator's public register under the exact same name and web address.
| Check | Fake platform | Legitimate exchange |
|---|---|---|
| How you found it | A stranger, an ad with a celebrity, a chat group | You chose it yourself and can find independent coverage |
| Regulator register | Absent, or a look-alike name and domain | Listed under the same name and domain |
| Withdrawals | Blocked until you pay a 'fee' or 'tax' | Your funds, no payment required to release them |
| Support | Only through the person who referred you or a chat | Official channels listed on the regulator's record |
3. Wallet drainers — one signature empties the wallet
A drainer is a malicious website that asks you to connect your wallet and sign a transaction, often presented as a free mint, an airdrop claim or a 'wallet verification'. The signature quietly grants permission to move your tokens, and they are gone within seconds. Hardware wallets help, but only if you read what you are signing.
- Never connect a wallet to a site reached through a DM, a reply or a sponsored search result
- Read the request: an 'approve' or 'permit' for all of a token is a red flag
- Keep long-term savings in a wallet you never connect to new sites
- Review and revoke old token approvals with a reputable approval checker
Get the Exchange Safety Checklist
Plus an alert whenever a top exchange changes its proof-of-reserves, licensing or security status. No spam, unsubscribe anytime.
We store only your email to send the checklist and safety alerts. See our privacy policy.
4. Address poisoning — the copy-paste trap
Scammers send a tiny or zero-value transaction from an address that starts and ends with the same characters as one you use. Later, when you copy an address from your transaction history, you copy theirs. Always copy addresses from your own saved contacts, check the full string rather than the first and last characters, and send a small test amount before a large transfer.
5. Recovery scams — the second hit
After a loss, victims are often contacted by 'fund recovery' firms, 'blockchain investigators', fake lawyers or people posing as police, promising to get the money back for an upfront fee. These are almost always the same networks returning for more. The FTC and other agencies warn that legitimate authorities do not charge you to recover stolen funds. Report through official channels only, and never pay anyone who contacts you promising recovery.
If it already happened — what to do now
Stop sending money, even if you are told one more payment will release everything. Do not delete anything: keep messages, usernames, website addresses, wallet addresses and transaction IDs, as these are what investigators need. Contact the exchange you sent funds from, as it may be able to flag the receiving address. Then report to the official body for your country. Reporting does not guarantee recovery, but it helps investigators connect cases.
- United States: FBI Internet Crime Complaint Center (ic3.gov) and the FTC (ReportFraud.ftc.gov)
- Canada: Canadian Anti-Fraud Centre
- Australia: Scamwatch and ReportCyber
- United Kingdom: Action Fraud (England, Wales and Northern Ireland) or Police Scotland
- Elsewhere: your national police cybercrime unit and financial regulator
Sources: FBI Internet Crime Complaint Center (IC3) · FTC: What to know about cryptocurrency and scams · FinCEN alert on 'pig butchering' (2023) · Canadian Anti-Fraud Centre · Scamwatch (Australia) · Action Fraud (UK)
Talking to someone you think is being scammed
Victims are often embarrassed or still trust the person who recruited them. Shame works for the scammer. Ask open questions rather than accusing: who suggested this app, have you ever withdrawn a large amount, has anyone asked you to pay a fee to withdraw. Suggest checking the platform on the regulator's register together. If they have already lost money, help them report it and warn them about recovery scams, which often follow within days.
Keep reading