As interest in cryptocurrency takes off, scammers have come out in droves to cash in. According to the Federal Trade Commission (FTC), there has been a massive increase in scam losses involving Bitcoin ATMs, which are often located in gas stations and convenience stores and used to exchange cash for cryptocurrency.
According to the FBI, Americans reported losing $333 million this way in 2025.
Many scams aren't unique to cryptocurrency. They are variations of financial scams that have been around for years, but still manage to ensnare many new victims. Crypto scams may be especially lucrative and easy to perpetrate because of investor inexperience, exploitable platforms and software, and the constant influx of new currencies and opportunities.
Most of the safeguards that help protect other financial systems aren't in place with crypto, and currently there is very little regulation or legal recourse. To make matters worse, cryptocurrency transactions aren't reversible. If you decide to invest in cryptocurrency, it's extremely important to try to protect yourself against scams and the possibility that both your money and your identity could be stolen. Here are some red flags to watch out for.
Extensive promotion
Some scams try to capitalize on investors’ desire to get in on the ground floor of a new crypto project. One scam called the "rug pull" may start with a fraudulent developer who easily and cheaply creates tokens or coins and initially sells them at a low value on a decentralized platform. After the developer hypes up the opportunity to make it look legitimate, people begin to buy and the value goes up sharply, but ultimately the developer "pulls the rug out" by abandoning the project and running off with the funds. The tokens or coins are now worthless.
Pump and dump
A related scheme called "pump and dump" involves insiders who quickly pump up a new or low-value cryptocurrency asset by heavily promoting it. Then, as outside buyers jump on board and drive prices higher and higher, insiders sell/dump their holdings at peak value, leaving outside buyers scrambling to minimize their losses by selling as the value plummets.
Scammers may advertise giveaways on social media, promising that if you enter and send cryptocurrency to a certain address, you'll get a great prize or multiply the amount you send in. These heavily promoted scams are often supposedly sponsored by celebrities or famous crypto or tech gurus. Unfortunately, your money will be the only thing given away.
Cryptocurrency payments required
If you own Bitcoin and hackers are able to steal your personal information from your currency exchange account (which happened with Coinbase in 2025), online scammers who have this information may try to convince you to pay them in cryptocurrency.
These ccammers may impersonate others, including government agencies, charities, well-known businesses, and utility companies, or even pose as someone you know. They may require payment in Bitcoin and make it easier for you to send it by providing a quick response (QR) code that can be scanned at a Bitcoin ATM. The Bitcoin comes out of your digital wallet and goes directly to the scammer.
If an institution is credible, there's no reason that it will only accept cryptocurrency and not traditional forms of payment.
If you are crypto-scammed
If you become victim of a crypto-scam, contact your cryptocurrency exchange immediately. Unfortunately, because cryptocurrencies are not regulated, you probably won’t recover your losses.
However, you may help others from becoming victims of similar scams by reporting fraud and other suspicious activities to:
- The FTC at ReportFraud.ftc.gov
- The Commodity Futures Trading Commission (CFTC) at CFTC.gov/complaint
- The Internet Crime Complaint Center (IC3) at ic3.gov
All investing involves risk, including the possible loss of principal, and there is no guarantee that any investment strategy will be successful. Cryptocurrencies are not traditional investments; they are highly speculative instruments, carry a significant amount of risk, and are not suitable for all investors. Cryptocurrencies are not typically subject to the same reporting and data integrity requirements that apply to more traditional investment products. The IRS is treating cryptocurrency as an asset subject to capital gains taxation rather than as a currency.
Prepared by Broadridge Advisor Solutions. © 2026 Broadridge Financial Services, Inc.