Cryptocurrency scams
Also known as:
- crypto scams
- scams
- fraud
What is Risk ?
Digital risk factors associated with their interests and activities
Cryptocurrencies are not controlled or regulated by banks, financial institutions, or governments. This means they have less customer protections. Fraud is estimated to cost owners and investors up to £1 billion every year.
Scams use tactics that promise rewards or guaranteed profits, in return for an initial investment or deposit. They can also:
- take the form of pyramid or ponzi schemes
- have other fake investments
- have fake celebrity endorsement
Trading and investments in cryptocurrency are worth over £1 trillion globally. There are thousands of cryptocurrencies, for example Bitcoin.
Where this can happen
Risks and motivations
Risks
Scamming
There are a number of cryptocurrency scams. If they are successful, people can lose money.
People can be targeted by:
- social media
- relationships built on dating sites or social media
Targeted scams can steal the person’s initial deposit for a cryptocurrency investment. Pyramid or ponzi schemes can be made to appear low risk, but investments may never return the promised pay-out.
Some cryptocurrency scams rely on a cryptocurrency being launched, only for the organisers to cash out. This makes the value of a victim’s investment drop.
Motivations
Cryptocurrency scams target people by offering unrealistic rewards, quick money, and guaranteed success.
Scams can be personally targeted, through relationships built on social media or on dating sites.
Scamming tactics can also involve fraudulent association with influential celebrities or popular businesses.
What you can do
A young person may understand the risks of trusting someone with physical money, but they might not see the same risks in a digital space.
You can help a young person to think about what they see online and to understand how scams can happen.
You can help them find ways to recover financially if they lose money they cannot afford.
Discussions might include:
- the lack of regulation means there are few consumer protections for young people or their money
- never make an initial payment with cryptocurrency because you cannot get it back
- to stick to well-known exchange platforms or sites and avoid offers that young people might see on social media or email.
- to watch out for phishing tactics like time-limited special offers, offers of free money, and promises of guaranteed profits
- if a young person is experiencing money worries, there are debt services that can help
If you think that a young person is at risk, follow your safeguarding procedure and read our safeguarding guidance.
Support
Specialist organisations can offer support in fraud, scams and debt.
Read more about cryptocurrency scams
Share your experience of cryptocurrency scams
You can tell us about:
- other terms you might have heard
- conversations you’ve had with young people
- a related platform or app
- another related risk or harm