Crypto Fraud in Digital Currencies and Assets: What You Need to Know to Avoid It and What to Do If You Fall Victim

What is Crypto Fraud?

Cryptocurrency is a digital currency designed to serve as both a means of payment and an investment asset. It is known for its high volatility, meaning its value can rise or fall very quickly.

As more people invest in crypto, criminals increasingly take advantage of the trend to commit fraud. In fact, crypto scams are on the rise, with thousands of people worldwide losing money to fake platforms, phishing schemes, pump and dump schemes, and rug pulls.

How Do These Scams Work?

There are many methods, but they all share one feature: an attractive, professional-looking offer that promises fast profits. Often this comes in the form of a crypto investment or mining opportunity. The advertisements appear on social media, in emails, or on slick websites. In reality, the aim is simply to take your money or steal your personal details.

Some common methods include:

Fake investment platforms: Websites that promise guaranteed returns. Once you deposit money, you cannot withdraw it and the platform disappears.

Phishing and fake wallets: Emails or messages that appear to come from well-known exchanges such as Binance or Coinbase, designed to steal private keys or login details.

Fake tokens and rug pulls: A promoter or group launches a new crypto project, attracting investors with marketing campaigns and promises of high profits or technological innovation. Once enough money has been invested, the promoters “pull the rug” by draining the funds and vanishing.

Pump and dump: Fraudsters artificially inflate the price of a token through hype on social media, then sell at the peak, causing the price to collapse.

Impersonation on social media: Scammers pose as celebrities or crypto experts to lure victims into investing.

Victims often feel that there is no way to recover their money, but it is important to know that there are legitimate ways to take action against fraudsters and pursue recovery. First, though, let’s look at how to protect yourself.

How to Protect Yourself

• Be cautious of advertisements promising quick and easy profits.

• Do not respond to unsolicited offers, whether by phone, email, or social media.

• Never invest based solely on advice from someone you only know online.

• Carefully check every opportunity sent by strangers or “old acquaintances” on social media. Remember that most people offering unsolicited crypto investments are unregulated, meaning you have no legal protection.

• Watch out for fake domains that mimic financial institutions, especially crypto exchanges. One way to detect them is to look up the institution’s official website and compare it to the link you received. Even small spelling errors may signal a fake address.

• A polished website or glowing reviews do not prove credibility. If someone you don’t know contacts you, do not provide personal or financial details and never send money.

• If you choose to invest, don’t allow yourself to be pressured into rushing a decision. Legitimate investments require due diligence.

• Do not download or use suspicious investment apps without confirming their legitimacy.

• Always double-check before transferring money. When in doubt, consult a professional investment adviser. The cost of one consultation is minor compared to the potential losses of falling victim to fraud.

• Perhaps the most important rule: if it sounds too good to be true, it probably isn’t real. Be very careful of promises of quick or easy wealth.

What To Do If You Suspect or Discover You’ve Been Scammed

• Stop all further transfers immediately. Do not send additional money or coins, even if asked to pay “taxes” or “fees” to release funds.

• File a police complaint as soon as possible and never inform the suspects that the police are involved so as not to compromise the investigation.

• Preserve all evidence, including screenshots of the transaction, wallet or bank transfer details, conversations with the fraudsters, and the domains, apps, or methods they used to contact you.

You are also welcome to reach out to us

How We Can Help

What sets crypto fraud apart from other frauds is that it often crosses borders. Effective recovery requires not only choosing the right forum (court and jurisdiction) but also working with international investigative authorities, exchanges, and intermediaries involved in enabling or carrying out the fraud.

At Collins Mirsaie | קולינס מירזאי, we bring deep and practical understanding of the crypto world, legal expertise and experience from both England and Israel, and strong collaborations with leading international investigation and law firms. This allows us to provide our clients with tailored, precise solutions that address their unique needs in the complex field of financial and crypto fraud.