How to spot investment and crypto scams before they cost you

In 2025, investment scams were the costliest kind of fraud reported to the FTC: consumers said they lost $7.9 billion to them, out of $15.9 billion in total reported fraud losses. The good news is that almost every scam relies on the same few tricks, and a few minutes of checking can stop most of them.

The red flags

Investor.gov's advice boils down to a short list. Any one of these is a reason to stop; two or more together is close to proof.

• Guaranteed returns. Every real investment carries risk. A promise of high returns with little or no risk is the most common sign of fraud.
• Pressure to act now. "Only three spots left," "the price goes up tomorrow." Scammers want you to send money before you have time to check.
• An unregistered seller. In the US, people who sell securities or give investment advice generally have to be registered. A seller who cannot be found in the official databases is a stop sign.
• Unusual ways to pay. The CFTC lists requests to wire money or pay in crypto, including at a bitcoin ATM, as warning signs, as well as payments going to an individual or a company other than the one you thought you were investing with.
• Unsolicited contact. A stranger who messages you with an investment idea, then quickly moves the chat to another app.

Why "2% a day" is impossible

Many crypto and "trading bot" schemes promise a small-sounding daily return. A small daily number compounds into an absurd yearly one. The table compares $1,000 growing at a promised 2% a day, compounded daily, with the same money growing at 7% a year.

Assumptions for illustration only: returns compound every day for the 2% promise; the 7% annual return is spread evenly across the year; no fees or taxes.

A 2% daily return works out to about 137,641% a year, multiplying your money roughly 1,377 times. If any fund could do that, $1 million invested would become about $1,377,408,292 in a single year. No such fund exists. The only way a scheme can "pay" those returns is with numbers on a screen, or with new investors' money, until it collapses.

Compare that with the 7% column, used here only as an illustration of a good year for a diversified investment such as an index fund. Even that is never guaranteed. Real wealth comes from modest returns compounding for decades, not from doubling your money every 36 days.

The scams to know

Relationship and romance investment scams

Regulators call these relationship investment scams; the fraudsters themselves call them "pig butchering." The CFTC describes the pattern: contact through a dating app, social media, a group chat or a "wrong number" text; weeks of friendly or romantic conversation; then a casual mention of how much money they are making trading crypto, gold or currencies. They may use altered or AI-generated photos and videos to look successful.

Fake trading platforms and apps

The relationship scam usually ends on a professional-looking website or app where your "account" shows strong profits. The balances are fake. Victims are often allowed to withdraw a small amount early on, to build trust before larger deposits. When you try to take out real money, there are suddenly fees, "taxes" or a loan that must be repaid first. The CFTC warns that an app being listed in a well-known app store does not make it legitimate.

Impersonation

Scammers pose as a broker, a bank, a well-known investor, a government agency or a regulator. The CFTC's advice is to verify any message that claims to come from a company you use by calling its published customer service number, not a number in the message. The FBI's IC3 also warns that criminals impersonate IC3 itself; it says it will never contact you directly asking for information or money.

Recovery scams

After a loss comes the second hit. The FTC explains that scammers buy lists of people who have already been defrauded, then contact them posing as a law firm, a government agency or a recovery service that can get the money back for an upfront fee. Never pay in advance to recover lost money, and never give your bank or card details to someone who contacted you out of the blue.

The scale of the problem

The FBI's Internet Crime Complaint Center received 72,984 complaints about investment fraud in 2025, with reported losses of $8.6 billion. It identified cryptocurrency investment fraud as the largest source of financial losses to Americans that year, at $7.2 billion. The FTC and FBI figures come from different reporting systems, and both only count what victims report, so the real total is likely higher.

How to check before you invest

Before sending money to anyone, look them up in the official US databases. All are free.

• Investor.gov: the SEC's investment professional background check searches brokers and advisers in one place.
• FINRA BrokerCheck: brokercheck.finra.org shows a broker's licenses, employment history and any disciplinary actions.
• SEC Investment Adviser Public Disclosure: adviserinfo.sec.gov covers investment adviser firms registered with the SEC or the states.
• Your state securities regulator may have more information, and Investor.gov suggests checking a company's filings on the SEC's EDGAR system.

If a person or platform is not listed, or the name is slightly different from the one you were given, do not invest. Fraudsters also clone the names and websites of real firms, so contact the firm using details from the official database rather than from the person who approached you. Our crypto basics guide explains how legitimate exchanges and wallets work.

Where to report

Report even if you are embarrassed or the amount is small; reports help investigators connect cases.

• SEC: submit a tip at sec.gov/tcr for securities fraud, including unregistered offerings and Ponzi schemes.
• FBI IC3: file at ic3.gov for online and crypto fraud. IC3 asks you to include the scammers' names and contact details, websites, payment dates and amounts, account numbers and the crypto wallet addresses you sent money to, and to keep copies of all messages.
• FTC: report at ReportFraud.ftc.gov. If the site is unavailable, file with IC3 and your state attorney general, and report to the FTC once it is back.

If you have already sent money, contact your bank or the payment service right away to try to stop or reverse the transfer.

What to do this week

1. Look up anyone who currently manages or sells you investments on BrokerCheck or adviserinfo.sec.gov.
2. Set a personal rule: no investment decisions based on messages from people you have not met in person, and no payments in crypto, gift cards or wires to individuals.
3. Talk to parents or friends who are new to investing about the "small daily return" trick and recovery scams.
4. Save the reporting links above, so you know exactly where to go if something feels wrong.

General education, not personal financial advice. Figures are illustrations computed from the stated assumptions.