A record-breaking year for crypto has brought in millions of new investors – but also an unprecedented number of scams. Bitcoin reached an all-time-high in May, pushing the overall market above $3 trillion. That same month, more than $600 million was lost to scammers, according to the Crypto Crime Report.
Cyber criminals and fraudsters have been emboldened by the arrival of new investors unfamiliar with the space, while new technologies like generative artificial intelligence have made it easier than ever to pull-off lucrative scams.
Regulators and lawmakers are struggling to crackdown on the issue, as enforcement plays catch up to innovation, but many of the tricks are easy to spot once you know about them. Here are the top ones to look out for in 2025, and how to avoid them.
Crypto wallet scams
One of the most disturbing trends in recent months has seen scammers weaponise search engines like Google and Bing in order to target crypto users searching for basic information about wallets. Crypto wallets are meant to be secure locations to hold the information needed to store and retrieve cryptocurrencies, however unauthorised sites are being used to spoof popular services.
Last month, researchers at SentinelLabs and Validin discovered 38,000 malicious web pages targeting major wallets like Trezor and MetaMask. Some of these scam sites even provide advice on how to avoid scams, in order to appear more legitimate.
“Victims are typically searching for crypto wallet recovery help or security advice, or simply login pages, and the attacker’s infrastructure is designed to capture that search traffic,” Tom Hegal, a threat researcher at SentinalLabs, told The Independent. “As such, there is a deceptive calmness to the infrastructure – no emails, no lures pushed out, just quietly waiting to ensnare.”
Users should also beware of fake crypto wallet apps, which have been appearing in Apple’s and Google’s app stores despite efforts from the tech companies to tighten app vetting.
Social media scams
One of the most prevalent scams is also the most visible. If you use X, then you may have already seen them: bright, colourful ads that take up most of the screen, boasting huge giveaways and fake pre-sales of new cryptocurrencies.
Many of the scams often claim to be endorsed by the platform or its owner, Elon Musk, despite the tech billionaire pledging to tackle the issue when he took over the company in 2022. The Independent has frequently reached out to X for comment on the issue, but is yet to receive any response.
Some of the adverts have even appeared on Musk’s profile page after scammers paid for the posts to be promoted on visible sections of people’s feeds. Another way users have been duped is through hackers hijacking the accounts of verified brands and celebrities in order to promote crypto scams. The issue is not unique to X, with hackers also taking over people’s accounts on Instagram and Facebook.
Rug pulls and Pump-and-dump schemes
Perhaps the best-known example of an alleged pump-and-dump scheme took place last December, when the “Hawk” digital coin lost more than 95 per cent of its value within hours of its launch.
The crypto token was backed by Hailey Welch, who achieved internet fame after her viral “Hawk Tuah” video. Its sudden dop in price led to accusations from some cryptocurrency commentators that its creators had sold off large holdings shortly after the project went live in order to profit from the hype surrounding the token.
Welch has denied allegations that the crypto project was a pump-and-dump scam, claiming that none of her team had sold their coins on the day of the launch.
Other notable celebrities to promote dubious crypto projects include reality TV star Kim Kardashian, footballer Lionel Messi, and Actress Lindsay Lohan.
Rug pulls work in a similar way to pump-and-dump schemes, whereby a crypto token is heavily promoted before early investors cash out, however they typically involve dud projects that fail to deliver on their promises.
‘Pig butchering’ scams
So-called pig butchering scams, where fraudsters gain the trust of victims and trick them into investing in fake cryptocurrencies, reached a record high in 2024. This was mainly due to the increasing abilities of generative artificial intelligence tools like ChatGPT, which allow scammers to use AI bots to snare victims on a massive scale.
Blockchain analysis firm Chainalysis estimated that such schemes increased nearly 40 per cent last year, contributing to nearly $10 billion of losses for crypto users.
“Pig butchering scams target and build relationships with individuals, convincing them to invest in fraudulent opportunities, and predominantly originate via large scam compounds in Southeast Asia,” Chainalysis noted in its Crypto Scam Revenue 2024 report.
The company warned that generative AI has made it easier and cheaper for criminals to expand operations, warning that the technology could “exponentially scale crypto scams”.
English (US) ·