How to Spot a Crypto Scam: The Red Flags Every Saver Should Know

Cryptocurrency has rarely been out of the headlines this year, and where attention goes, fraud follows. The Financial Conduct Authority's InvestSmart campaign sets out clear rules for how crypto may lawfully be promoted in the UK, and those rules double as a field guide for spotting the crooks: if you know what a legitimate advert looks like, an illegitimate one is much easier to see.

Start with the basics. Regulated crypto marketing must carry prominent warnings about the risk of losing money, and it must not offer free gifts to join or bonuses for referring a friend. If an advert promises rewards for signing up, or carries no risk warning at all, the firm behind it may be acting illegally, or running an outright scam. These are not technicalities; they are the boundary between marketing and manipulation.

The red flags

Guaranteed returns top the list. Crypto is volatile by nature, and anyone promising fixed or certain profits is describing an investment that does not exist. Pressure to act fast comes next: countdown timers and "last chance" offers exist to stop you thinking. Celebrity endorsements deserve particular caution. In June, Nigel Farage contacted X over fake adverts depicting him fighting with the Bank of England Governor Andrew Bailey, one of a wave of deepfake investment scams using famous faces without their knowledge. If a familiar face is urging you to invest, assume nothing until you have checked.

Unsolicited contact is another warning sign, whether by phone, text, social media or messaging app. So is any request to move money to a "safe" wallet or account: no legitimate firm needs you to shift your savings to protect them, and no genuine investment requires secrecy from your bank or your family. Bonuses, gifts and missing risk warnings complete the picture.

Behind all of this sits a hard fact about protection. Until the new regulatory regime begins on 25 October 2027, most crypto activities remain unregulated, and investors are unlikely to have access to the Financial Services Compensation Scheme or the Financial Ombudsman Service. If the money goes, it is probably gone. That is not a reason for panic, but it is a reason for care.

The collision of crypto and public life has cut both ways this year. Alongside the deepfake adverts, the government banned cryptocurrency donations to UK political parties on 25 March, following a review into foreign interference. The lesson for savers is the same as the lesson for lawmakers: when money moves quickly and anonymously, scrutiny matters.

What to check, and what to do if it goes wrong

Before parting with a penny, check the FCA's register to see whether a firm is authorised or registered, and search the regulator's warning list of known unauthorised firms and clone operations. A company that appears on neither should get no further. Be equally wary of anyone who contacts you out of the blue claiming they can recover money you have already lost; recovery scams deliberately target the same victims twice.

If you think you have been scammed, act quickly and without embarrassment. These operations are professional, and their victims come from every walk of life. Report what has happened to Action Fraud, the national reporting centre for fraud and cyber crime, and contact your bank immediately, because payments can sometimes be stopped or recalled if you move fast. Keep records of everything: the adverts, the messages, the wallet addresses and the transaction references.

None of this means the only safe course is to avoid crypto altogether. It means treating it with the same scepticism you would bring to any stranger asking for your savings. The golden rule predates bitcoin by centuries: if an opportunity sounds too good to be true, it is.