Investment-style fraud and fake platforms

This guide describes a fraud pattern so that you can recognise it. It does not compare platforms, and it is not a view on whether anyone should put money into crypto-assets — we never give that kind of advice.

How the scheme is built

Regulators in Europe, the UK and the US have warned about this pattern for years. The details change, but the stages stay the same.

The hook

It often starts with an advert that uses a well-known person's face without permission, a fake news article about a "new opportunity", or a group chat where members post screenshots of their gains. Sometimes a new online friend or a "mentor" mentions a platform casually and offers to help you get started.

The platform

The website or app looks professional. There is a login, a live-looking dashboard with moving graphs, a support chat and often a personal "account manager" who is friendly and always available. Your deposit appears in the account, and the balance seems to grow day by day. In many cases you are even allowed to withdraw a small amount early on. That small withdrawal is bait: it convinces you the platform is real.

The squeeze

Once trust is established, the pressure begins. The account manager suggests larger deposits to reach a "higher level", hints at a short window, or encourages you to borrow, use savings or ask relatives. When you finally try to withdraw a meaningful amount, something goes wrong. You are told to pay a tax, an anti-money-laundering fee, an "unfreezing" charge or a deposit to prove your identity. Each payment is followed by a new demand.

The exit

Eventually the site disappears, the account is "suspended for breaking the rules", or the manager stops replying. Shortly afterwards, many victims are contacted by people offering to recover the money for a fee. That is a second scam, described in our guide to "recovery" scams.

Why the dashboard proves nothing

A number on a web page is just a number. The people who run a fake platform control the website completely, so they can display any balance, any history and any graph they like. The only meaningful test is whether you can withdraw your own money freely, without paying anything first — and by the time most people try, they have already sent far more than they can afford to lose.

Clone firms and fake regulators

Some fraudsters copy the name, registration number, address and even staff names of a real, authorised firm. The UK Financial Conduct Authority calls these clone firms. Others send certificates, letters or e-mails that appear to come from a regulator, a court or a central bank, sometimes demanding a "release fee". Real regulators do not contact consumers to demand payments, and they do not guard individual accounts on anyone's behalf.

Checking a firm yourself

Before you trust any firm with money, look it up in an official register — and reach the register by typing the regulator's address yourself, not by following a link you were sent.

• UK: the FCA's Financial Services Register lists authorised firms and their official contact details. The FCA also publishes warnings about unauthorised firms through ScamSmart.
• EU: each country has a national competent authority. Under the EU Markets in Crypto-Assets Regulation (MiCA), crypto-asset service providers need authorisation, and the European Securities and Markets Authority (ESMA) publishes information on authorised providers and links to national warnings.
• US: the Securities and Exchange Commission and state regulators publish information about registered firms and enforcement actions.

Two cautions. First, if a firm is listed, check that the website address and phone number match the ones in the register exactly; clones rely on people skipping this step. Second, a firm missing from a warning list is not proof that it is safe. Warning lists only contain the names someone has already reported.

Pressure points to watch for

• Being encouraged to take out a loan, use a credit card or remortgage a home.
• Being coached on what to tell your bank if it asks about a transfer.
• Being told that a withdrawal needs a payment first.
• Being moved from a public chat into private messages with a "senior adviser".

Any one of these is reason enough to stop and talk to someone you trust, outside the conversation.

This guide is general safety education. It is not financial, legal or security advice for your individual situation, and it does not recommend acquiring, holding or disposing of any crypto-asset. If you think you are dealing with fraud, contact your bank and the police.