Top Crypto Scams Explained: Rug Pulls, Phishing & Ponzi Schemes

The bull market minted millionaires in 2024, but scammers cashed out $5.6 billion from victims, more than most countries’ GDPs. One click, one fake link, one “guaranteed 100x” promise, and your wallet vanishes forever.

Rug pulls. Phishing traps. Ponzi pyramids. These aren’t random crimes, they’re engineered to exploit crypto’s speed, anonymity, and irreversibility. Developers drain liquidity pools overnight. Fake sites steal your seed phrase. “Projects” pay early investors with your money until the whole thing collapses.

This article exposes the top 3 scams crushing wallets right now, with 2025 case studies, dead giveaway red flags, and bulletproof protection steps. If you hold crypto on Coinbase, trade DeFi, or chase altcoins, read this before your next trade.

Recent Crypto Scams Trends (2024-2025)

Scammers evolved fast over the past year. AI deepfakes became their favorite weapon. Fake videos of Elon Musk and Donald Trump promoting “exclusive” Bitcoin giveaways stole over $5 million from victims on X (formerly Twitter) and YouTube. These clips look completely real until you notice the URL leads somewhere sketchy.

Memecoin rug pulls exploded during the 2024 bull run but shifted tactics in 2025. Data shows rug pull incidents actually decreased in 2025 compared to previous years, but individual losses skyrocketed. Some single crypto scams wiped out hundreds of millions. The average loss per incident jumped significantly as scammers targeted larger liquidity pools on newer chains like Sui and Base.

DeFi honeypots are the newest headache. These fake protocols let you deposit funds but block withdrawals through hidden smart contract code. One campaign across Ethereum and Binance Smart Chain deployed 270 million address poisoning attempts in 2025, successfully stealing $83.8 million by redirecting transactions to attacker-controlled wallets.

Rug Pulls

How Rug Pulls Actually Work

Here’s the typical playbook. Developers create a new token (let’s call it “MoonShot”) and add liquidity to a decentralized exchange like Uniswap or PancakeSwap. They pair MoonShot with Ethereum or Binance Coin, creating a trading pool.

Marketing starts immediately. Telegram groups, Twitter campaigns, maybe some paid influencers. The token price climbs as buyers rush in. Then comes the rug pull. Developers either remove all liquidity from the pool (leaving traders with untradeable tokens), mint millions of new tokens if they kept that ability in the code and dump them for ETH, or activate hidden functions that prevent anyone except them from selling.

The entire operation takes 24-72 hours from launch to exit. It’s one of the most common crypto scams in DeFi right now.

2025 Rug Pull Cases

Cetus DEX Exploit (May 2025): Attackers deployed malicious token contracts on Cetus, a decentralized exchange built on the Sui blockchain. They drained $220 million from liquidity pools through backdoor vulnerabilities in smart contracts. While Cetus developers froze some funds during recovery efforts, blockchain analysts discovered the contracts contained deliberate backdoors. This suggested a “soft rug pull” where insiders maintained hidden control. The incident shook confidence in Sui’s DeFi ecosystem and stands as one of the year’s biggest crypto scams.

DeFi Honeypot Tokens (2025): A sophisticated multi-chain operation targeted Ethereum and Binance Smart Chain throughout early 2025. These crypto scams created tokens with code that allowed buying but blocked selling for everyone except the creators. They used multi-wallet dumps to avoid detection and deployed address poisoning. This trick sends tiny amounts from addresses that look similar to those victims recently transacted with. When victims copy-paste addresses from transaction history, they accidentally send them to the scammer’s wallet. This campaign confirmed $83.8 million in losses from over 270 million poisoning attempts.

Base Chain Memecoins (Continuing 2025): The Base network saw dozens of rug pulls despite improved security. One project pumped to a $15 million market cap before developers removed all liquidity in under 10 minutes. These memecoin crypto scams often launch with celebrity endorsement, deepfakes or fake partnerships with legitimate protocols.

Between 2020-2024, researchers identified 1,048 confirmed rug pull incidents across major chains. The 2025 data shows fewer incidents but dramatically higher individual losses. Scammers now target established pools with millions in liquidity rather than launching hundreds of small crypto scams.

Red Flags to Spot Rug Pulls

Watch out for these warning signs when evaluating new projects. Anonymous teams with no LinkedIn profiles or public history are major red flags. Check if liquidity is locked using sites like Unicrypt or Team Finance. Most legitimate projects lock liquidity for months or years.

Read the token contract on Etherscan or BscScan. Look for mint functions or transfer restrictions that give developers too much control. If one or two wallets hold massive token allocations, that’s dangerous. Unrealistic promises like “guaranteed 1000x gains” are always signs of crypto scams. No audit from reputable firms like CertiK or ConsenSys Diligence? Walk away.

On Sui or other newer chains, verify contract permissions and look for unusual admin functions. The Cetus incident proved that even established platforms can hide vulnerabilities.

Phishing Scams

Common Phishing Tactics

Phishing in crypto means tricking you into revealing seed phrases, private keys, or approving malicious transactions. These crypto scams impersonate legitimate platforms with scary precision.

Email and SMS Phishing: You receive a message claiming your Binance account has “suspicious activity,” or your wallet needs “verification.” The link looks real, maybe binance-security.com instead of binance.com. One small typo you don’t notice. You enter credentials on the fake site, and your account gets drained within minutes.

Social Media Attacks: Discord and Telegram are hunting grounds for crypto scams. Scammers create fake support accounts, join crypto community servers, and DM members offering “help” with issues. They might share a screen-sharing link or ask you to “validate” your wallet by entering your seed phrase.

Wallet Drainer dApps: You connect your MetaMask or Trust Wallet to what looks like a legitimate DeFi protocol. Hidden in the smart contract approval is permission to withdraw unlimited tokens from your wallet. By the time you notice, your USDT, ETH, and every ERC-20 token are gone. These wallet-draining crypto scams have become extremely sophisticated in 2025.

Major 2025 Phishing Cases

Coinbase Support Breach (May 2025): This massive incident exposed just how vulnerable centralized exchange users remain. Scammers bribed Coinbase customer support agents to leak user data, including email addresses, phone numbers, and account details. Armed with this information, attackers launched targeted phishing campaigns. They contacted victims posing as official Coinbase support, demanding ransom payments or tricking users into revealing credentials.

The scale was staggering. India’s Enforcement Directorate seized Rs 21.71 crore (approximately $2.6 million) from an Indian national linked to the operation. However, estimates suggest total losses ranged between $180 million and $400 million globally. Victims received legitimate-looking communications because scammers had actual Coinbase data. Many lost their entire portfolios before realizing the “support agent” was running crypto scams.

WhatsApp/Facebook Fake Platform Scams (2025): California’s Department of Financial Protection tracked dozens of cases where victims lost hundreds of thousands through social media lures. Scammers created fake investment platforms with domains like pzmqgow.top, bittisport.com, and nvbit.cc designed to mimic legitimate crypto brokers.

The setup was elaborate. After initial contact on WhatsApp or Facebook, scammers built trust over weeks, showing fake trading dashboards with fabricated profits. Victims deposited crypto and watched their balances “grow” on screen. When they tried withdrawing, the platform either demanded more deposits to “unlock” funds or simply disappeared. California documented losses exceeding $358,000 per victim in multiple cases. The fake sites looked professional with SSL certificates, customer support chatbots, and trading interfaces. All designed to steal deposits through these phishing crypto scams.

AI-Powered Deepfake Scams (2025): Scammers elevated phishing with AI-generated videos. Fake clips of Vitalik Buterin, Coinbase CEO Brian Armstrong, and other crypto figures announced “exclusive opportunities” on compromised or impersonator accounts. These weren’t crude edits. AI made the voices and lip movements look real. Links led to wallet-draining sites or fake giveaway pages. These represent the evolution of crypto scams using cutting-edge technology.

How to Stay Safe from Phishing

Never share your seed phrase. Not with “support,” not with anyone. Legitimate platforms never ask for it. Type URLs manually instead of clicking links to avoid crypto scams. Enable two-factor authentication on every exchange, like Coinbase, Binance, and Kraken, using authenticator apps, not SMS, which can be intercepted.

Use hardware wallets like Ledger or Trezor for significant holdings. Even if your computer gets compromised, transactions need physical confirmation. Bookmark your frequently used crypto sites. Check the SSL certificate (the padlock icon) before entering credentials.

Be suspicious of any unsolicited contact, even if they have your account information. The Coinbase breach proved scammers can obtain legitimate data. Verify independently by logging in through official apps or websites you navigate to manually, never through provided links.

Ponzi Schemes

How Crypto Ponzi Schemes Operate

A Ponzi scheme pays early investors with money from new investors, not from legitimate profits. Eventually, there aren’t enough new people to sustain payouts, and the whole thing collapses. Crypto versions add technological complexity to hide this simple formula. These crypto scams have existed since Bitcoin’s early days, but keep reinventing themselves.

The typical pitch promises 1-30% monthly returns through “proprietary trading bots,” “AI algorithms,” or “staking pools.” They might show you a dashboard with increasing balances. Early adopters actually receive payouts, which they screenshot and share, attracting more victims. The scheme often includes MLM (multi-level marketing) elements where you recruit friends and earn commissions on their deposits.

Scammers use crypto’s features to their advantage. They move funds through tumblers and privacy coins to obscure the money trail. Smart contracts create an illusion of automation and legitimacy. Because crypto operates globally, it can target victims across dozens of countries before regulators catch up.

2025 Ponzi Scheme Busts

Prince Group Network (October 2025): This was the biggest crypto seizure in history and one of the most elaborate crypto scams ever documented. Chen Zhi’s global operation ran what authorities called a “pig butchering” scheme with strong Ponzi elements. The network promised 10-30% monthly returns through fake investment apps and platforms.

The operation was massive. Scammers built relationships with victims over weeks or months through dating apps and social media, eventually introducing them to “investment opportunities.” Early investors received payouts (funded by new victim deposits), which encouraged them to invest more and recruit others. Classic Ponzi mechanics wrapped in romance scam tactics.

When the US Department of Justice dismantled the network, they seized 127,000 Bitcoin worth approximately $15 billion. That’s the largest cryptocurrency forfeiture ever recorded. Thousands of victims across multiple continents lost their life savings. The case exposed how modern crypto scams blend relationship manipulation with fake trading platforms to sustain the fraud longer.

hrdebit.com AI Investment Scam (2025): Victims discovered this scheme through social media ads promoting “AI-powered crypto trading.” The platform showed sophisticated dashboards with real-time price feeds and fabricated trading profits. Users deposited Bitcoin or Ethereum and watched their balances grow daily.

The Ponzi structure became obvious when users tried withdrawing. The platform demanded additional deposits to “unlock” funds or claimed processing fees were required. Some victims received small early withdrawals (paid from new deposits) to maintain the illusion, then lost everything when they reinvested larger amounts. California’s financial regulators received dozens of complaints before the site disappeared with millions in deposits. These AI-themed crypto scams are particularly effective because they sound technologically advanced.

Classic Ponzi Schemes:

While 2025 saw more hybrid crypto scams, pure Ponzi schemes still reference the playbook established by earlier frauds:

Warning Signs of Crypto Ponzis

Guaranteed returns regardless of market conditions are the biggest red flag. Bitcoin is volatile, so no strategy guarantees profit. Referral bonuses that seem too generous indicate you’re recruiting for crypto scams rather than investing legitimately.

Vague explanations about how profits are generated, like “AI algorithms” or “arbitrage bots” without specifics, should raise alarms. Pressure to recruit others or invest more to “unlock” withdrawals is classic Ponzi behavior. Difficulty withdrawing funds through delays, minimum holding periods, or additional deposit demands means you’re likely caught in crypto scams.

No verifiable blockchain addresses showing legitimate trading operations is a major problem. Team members with fake credentials or stock photos appear across many crypto scams. Platforms discovered through dating apps or unsolicited social media messages almost always turn out to be fraudulent.

Check if the platform is registered with financial regulators. Search “[platform name] + scam” before depositing anything. The Prince Group case proved that sophisticated crypto scams can run for years, so don’t assume longevity equals legitimacy.

Other Crypto Scams to Watch For

Pig Butchering (2025 Focus): This long-con starts with “accidental” messages on WhatsApp or Telegram. The scammer builds a romantic or friendly relationship over weeks, eventually introducing crypto investment opportunities. They show you their “successful” trades on fake platforms. Once you deposit funds (sometimes hundreds of thousands), withdrawals become impossible. The Prince Group bust revealed these operations often run from Southeast Asian compounds where trafficked workers are forced to execute crypto scams.

Fake Giveaways: Impersonators create accounts mimicking Vitalik Buterin, Coinbase, or other crypto figures. They announce giveaways where you send 0.1 ETH and supposedly receive 1 ETH back. You send money to the address; nothing returns. These crypto scams stole millions during the 2024-2025 bull run, often using compromised verified Twitter accounts to appear legitimate.

Recovery Scams: After getting scammed once, victims receive DMs from “hackers” or “recovery specialists” claiming they can retrieve lost funds for an upfront fee. It’s a second layer of crypto scams targeting desperate people. No legitimate service operates this way.

Protecting Yourself: Practical Prevention Steps

1. Research everything (DYOR): Check team backgrounds on LinkedIn. Read multiple reviews. Look for red flags before investing a single dollar. Verify smart contracts on Etherscan, BscScan, or chain-specific explorers. This basic step prevents most crypto scams.
2. Use established exchanges: Stick with Coinbase, Binance, Kraken, Gemini for buying and selling. They have insurance and regulatory oversight. Even with breaches like the 2025 Coinbase incident, regulated exchanges offer more protection than unknown platforms where crypto scams operate freely.
3. Hardware wallets for storage: Ledger and Trezor keep private keys offline. Even if scammers access your computer or obtain your data through breaches, they can’t move funds without physical device confirmation. This protects against many crypto scams.
4. Verify every URL manually: Type exchange addresses directly. Don’t trust search engine ads or email links. The pzmqgow.top scam showed how convincing fake domains can be in crypto scams.
5. Enable 2FA everywhere: Use authenticator apps (Google Authenticator, Authy), not SMS codes which can be intercepted through SIM swaps. This adds crucial protection against crypto scams.
6. Check smart contracts: Before connecting wallets, review contracts on Etherscan. Look for audits from CertiK, Trail of Bits, or OpenZeppelin. The Cetus and honeypot token scams exploited hidden contract functions. Understanding smart contracts helps you avoid crypto scams.
7. Never share seed phrases: Write them on paper, store in secure locations. Never photograph them. Never enter them anywhere except when recovering a wallet on official apps. No support team ever needs your seed phrase. This rule alone prevents countless crypto scams.
8. Question unrealistic returns: The crypto market is volatile. Anyone guaranteeing 10-30% monthly is running a Ponzi. The Prince Group and hrdebit.com cases proved this rule still holds in 2025 for identifying crypto scams.
9. Revoke suspicious permissions: Visit Revoke.cash or Etherscan’s token approval checker. Remove permissions for unknown contracts that might drain your wallet. Regularly checking prevents lingering crypto scams.
10. Stay informed: Follow legitimate crypto news sources. Join communities that discuss security. Scam techniques evolve, so your knowledge must too. The 2025 data shows criminals constantly innovate with AI, insider breaches, and cross-chain exploits in their crypto scams.

How can I tell if a crypto project is a rug pull before it happens? 

Check if liquidity is locked using Unicrypt or Team Finance. Verify the team’s real identities on LinkedIn. Read the smart contract audit from firms like CertiK. If the contract has mint functions or transfer restrictions, avoid it. Anonymous teams with no track record are high-risk for crypto scams. The Cetus DEX incident showed that even audited protocols can have hidden vulnerabilities, so always invest only what you can afford to lose.

What should I do if I’ve been phished? 

Immediately transfer any remaining funds to a new wallet with a different seed phrase. Report the incident to the exchange or platform involved. File reports with local authorities and the FBI’s IC3 (if in the US). Check Revoke.cash to cancel any malicious smart contract approvals. Contact your exchange if your account was compromised in a breach like the 2025 Coinbase incident. They may have recovery procedures. Unfortunately, stolen crypto is rarely recovered from crypto scams.

Are all high-return crypto investments Ponzi schemes? 

Not necessarily, but guaranteed high returns are always suspicious. Legitimate DeFi protocols offer variable yields based on market activity. They never guarantee fixed percentages. If someone promises 10-30% monthly regardless of conditions, it’s almost certainly a Ponzi like the Prince Group or hrdebit.com operations. Even legitimate staking on Ethereum only yields 3-5% annually. Anything higher needs serious scrutiny for crypto scams.

Can hardware wallets protect against all scams? 

Hardware wallets prevent remote theft of private keys but don’t protect against rug pulls, sending funds to scammers voluntarily, or approving malicious transactions. They secure your keys but can’t stop you from connecting to a fake dApp or investing in fraudulent projects. They’re essential for security, but not a complete solution against crypto scams.

How do I verify a crypto website is legitimate? 

Type the URL manually, check the SSL certificate, search for the platform’s regulatory registration, read independent reviews on Reddit and Twitter, verify social media accounts are official (check follower counts and verification badges), and never trust sites discovered through ads, emails, or unsolicited messages. The pzmqgow.top and bittisport.com operations used professional-looking sites with SSL certificates. Always cross-reference with official sources to avoid crypto scams.

What makes crypto scams different from traditional financial fraud? 

Crypto transactions are irreversible and pseudonymous. There’s no bank to call for a chargeback. Scammers operate across borders beyond single-country regulations. The technology’s complexity confuses victims. Law enforcement recovery rates are extremely low compared to traditional fraud. The 2025 Prince Group case required international cooperation to seize $15 billion. Most smaller crypto scams never get investigated.

Where can I report crypto scams? 

In the US, reports to the FBI’s Internet Crime Complaint Center (IC3), the SEC, and the CFTC. UK residents can contact Action Fraud. Most countries have cybercrime units. Also report to the exchange or platform involved (Coinbase, Binance) and post warnings on Reddit’s r/CryptoScams to help others avoid similar crypto scams. California residents can file with the Department of Financial Protection.

Is it safe to invest in new crypto projects? 

\New projects carry extreme risk. Only invest money you can afford to lose completely. Stick to established cryptocurrencies like Bitcoin and Ethereum for the majority of your portfolio. If you do invest in new tokens, verify team credentials, check for audits, ensure liquidity is locked, and never invest based on hype alone. The 2025 data shows that even decreasing rug pull incidents still caused hundreds of millions in losses from crypto scams.

Conclusion

The crypto industry isn’t slowing down, and neither are the criminals. As the market grows and new investors enter, scammers refine their techniques. The 2025 data tells a troubling story. Fewer scams overall, but dramatically higher individual losses. The Cetus DEX exploit took $220 million. The Prince Group operated a $15 billion fraud. The Coinbase breach cost victims up to $400 million.

Your best defense against crypto scams is education and skepticism. Verify everything. Question promises that sound too good. Use proper security tools. Remember that in crypto, you’re your own bank. There’s no customer service number to call when something goes wrong. The fake platform victims who lost $358,000 each learned this lesson the hard way.

The blockchain industry has legitimate potential. PayPal processes crypto transactions now. BlackRock manages Bitcoin ETFs. Major banks like JPMorgan experiment with blockchain settlement. But alongside this growth, scammers multiply and innovate with AI deepfakes, insider breaches, and sophisticated social engineering.

Stay alert, do your research, and never invest more than you can afford to lose. The crypto space rewards careful investors and punishes the careless. 

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Disclaimer:

Look, we’re just journalists reporting the news here, not your financial advisors. Everything you read above is for information purposes only. Crypto is wild, unpredictable, and can absolutely wreck your savings if you’re not careful. Never invest money you can’t afford to lose. Seriously, we mean it. Do your own research, talk to actual licensed financial professionals, and remember that past performance means absolutely nothing when it comes to future results. The crypto market can turn on a dime, and what’s hot today might be toast tomorrow. We’re not responsible for your investment decisions, good or bad. Trade smart, stay safe, and don’t bet the farm on anything you read on the internet, including this article.