The surge in cryptocurrency prices has once again sparked a wave of scams, with many investors falling victim to fraudulent schemes driven by the fear of missing out (FOMO). Experts warn that heightened market activity presents a prime opportunity for scammers to exploit inexperienced investors, leading some to lose vast amounts of money.
The fear of missing out on lucrative gains is a powerful motivator for both new and seasoned crypto investors, but it also serves as a perfect catalyst for fraudsters. Stanford Cardoz, the anti-money laundering director at BitOasis, a virtual assets trading platform, explains, “Because of this, fraudsters exploit this environment and target individuals who lack sufficient knowledge about virtual assets.”
A Surge in Crypto Scams
The rise in cryptocurrency prices, including Bitcoin’s recent surge to a record $108,000, has attracted an influx of new investors eager to capitalize on the momentum. This growing interest has created an environment ripe for scams, particularly in the non-fungible token (NFT) and decentralized finance (DeFi) sectors.
One Dubai-based investor, MB, recalls being scammed in 2021 during a period of heightened market excitement. “I saw one of these mints on Twitter, which looked legitimate,” he says. “However, maybe these accounts paid to get verified on Twitter and bought fake followers. I decided to mint an NFT but ended up clicking a phishing link instead, which analysed all assets in my wallet and stole them. I lost almost $60,000.”
As the price of Bitcoin continues to climb, a recent study by Chainalysis revealed that the value of cryptocurrencies stolen in 2024 reached a staggering $2.2 billion, with over 60% of that attributed to North Korea-affiliated attacks. The report highlights a 21% increase from the previous year, marking the fourth consecutive year of breaches surpassing the billion-dollar threshold.
Caution Is Key
While the crypto industry offers opportunities for substantial profits, the risks are equally significant. MB, who fell victim to another scam at the beginning of 2025, learned the hard way. He attempted to invest in a crypto project called Ethena, but a fraudulent website mimicked the legitimate platform, leading to a $5,000 loss. “I failed to look at the website URL accurately,” he admits.
To protect himself in the future, MB now uses a browser extension called Pocket Universe, which helps shield users from Web3 scams. “When I visit a crypto-related Twitter page, I make sure the followers are legitimate. There are many scam Twitter pages out there,” he says.
More sophisticated scams have also emerged, such as scammers gaining access to victims’ devices and stealing their crypto seed phrases. MB recalls how a scammer impersonated someone on Discord and ultimately gained administrative access to his community, promoting a scam project. “Unfortunately, a few members in my community ended up minting this project, which was a scam and they all lost money,” he recalls.
Global and Local Challenges
The global nature of crypto scams makes them particularly challenging to regulate, according to Cardoz. “Scams, especially in Web3 and the crypto ecosystem, are agnostic of jurisdiction,” he notes. However, some regions have introduced more robust frameworks to protect consumers. The UAE, for example, has enacted comprehensive regulatory measures, including the creation of the Virtual Assets Regulatory Authority (VARA), which ensures that virtual asset service providers communicate risks to vulnerable clients.
Navin Gupta, CEO of Crystal Intelligence, stresses the importance of public-private partnerships in combating crypto crime. “Every day, scammers come up with new ideas, and they are highly sophisticated individuals and organised groups,” he says. Gupta also warns crypto users to conduct the same level of due diligence that they would in traditional financial markets.
In the UAE, victims of crypto scams are encouraged to report incidents to their digital asset provider or directly to Dubai Police, who have established smart police stations for filing complaints.
Avoiding Crypto Scams
Experts recommend that investors take steps to safeguard their assets. Cardoz advises crypto newcomers to conduct thorough research and only use licensed and regulated virtual asset service providers (VASPs). He also emphasizes the importance of securing accounts with multi-factor authentication and avoiding unsolicited investment offers.
“Customers in the crypto field should exercise the same due diligence that they would apply in the fiat world,” Cardoz concludes, urging investors to remain vigilant and skeptical of “too good to be true” investment opportunities.
