Crypto scams are one of the biggest risks for beginners. The FCA and Action Fraud receive thousands of reports every year from UK victims who have lost money to fraudulent crypto schemes. The amounts lost can be devastating. So what better than listing the 7 crypto scams UK investors need to look out for!
The good news is that most scams follow recognisable patterns. Once you know what to look for, they are much easier to spot.
This is the most common crypto scam in the UK. You are contacted out of the blue, often via social media, WhatsApp, or dating apps, by someone who offers to help you invest in crypto. They show you impressive returns on a professional-looking platform.
The platform is fake. The returns are fake. When you try to withdraw your money, you either cannot, or you are told you need to pay a “fee” or “tax” to release it. That fee disappears too.
The FCA warns specifically about this type of scam, known as an authorised push payment (APP) fraud. Never invest through a platform introduced to you by a stranger online.
Scammers create fake adverts and social media posts using the names and faces of famous people to promote crypto schemes. You might see a fake Elon Musk, Martin Lewis, or a well-known TV personality apparently endorsing a crypto investment opportunity.
These are fabricated. Real celebrities do not send you direct messages asking you to invest. If you see a celebrity endorsing a specific crypto scheme, search for it on the FCA’s ScamSmart website before doing anything.
A rug pull happens when the creators of a new cryptocurrency or NFT project hype it up, attract investors, and then disappear with the funds. The token becomes worthless overnight.
These are particularly common with new, unknown tokens promoted heavily on social media and in online communities. Stick to established cryptocurrencies listed on reputable exchanges. Be extremely sceptical of anything promoted as a “new opportunity” or “early access.”
Phishing scams try to steal your exchange login details or wallet credentials by tricking you into visiting a fake website. You might receive an email that looks like it is from Coinbase or Kraken, warning you of a problem with your account and asking you to click a link and log in.
The link goes to a convincing fake site. When you enter your details, scammers capture them and drain your account.
Always type exchange URLs directly into your browser. Never click links in emails claiming to be from crypto platforms. Check the URL carefully before entering any login details.
Scammers pose as customer support agents for popular exchanges or wallets. They find people asking for help on social media or forums, and offer to assist. They then ask for your seed phrase, password, or remote access to your device.
No legitimate exchange or wallet company will ever ask for your seed phrase or password. Ever. If anyone asks for these, stop contact immediately.
A group of people buy a low-value cryptocurrency in large quantities, then aggressively promote it online to drive the price up. Once the price has risen, they sell their holdings. The price collapses and everyone else loses money.
These schemes often play out in Telegram groups, Discord servers, and on social media. If you see a coin being pushed heavily with claims of imminent price rises, treat it with extreme scepticism.
These target people who have already been scammed. Someone contacts you claiming they can recover your lost crypto for a fee. They cannot. There is no way to recover crypto that has been sent to a scammer. Recovery scam artists are simply stealing from victims a second time.
If you have lost money to a crypto scam, report it to Action Fraud and the FCA. Do not pay anyone who claims they can get it back.
The FCA’s ScamSmart tool at fca.org.uk/scamsmart lets you check whether a firm is registered and whether it has been flagged as suspicious. Use it before putting money anywhere.