More than $11 billion in reported losses last year trace back to cryptocurrency investment fraud, according to the FBI’s 2025 Internet Crime Report, and the bureau says one moment reliably marks the scheme before the money is gone for good: an account that freezes the instant a victim tries to withdraw, followed by a demand for “taxes” or “fees” to unlock it. The FBI’s cryptocurrency investment fraud guidance calls that sequence exactly what it looks like: “This is a trap.” It is the single moment the bureau says separates a slow-building fraud from the point of no return.
The freeze rarely appears at the start. Investigators describe a scheme built to look legitimate for weeks or months before the platform ever asks for money it has no intention of returning, which is why the withdrawal freeze, not the initial pitch, is the moment the FBI most wants recognized quickly.
How the trust gets built first
According to the FBI’s cryptocurrency fraud guidance, contact typically begins on social media, a dating app, WhatsApp or Telegram, or through an online ad, and a request to move the conversation to a private messaging app early on is itself a warning sign. From there, the bureau describes tactics built to manufacture trust over time: flattery, invented shared experiences, coaching on how to respond if law enforcement asks questions, and — in some cases — deepfake video or a real person hired to impersonate the supposed contact.
Once trust is established, the pitch arrives: cryptocurrency trading, an “AI-based” program, futures trading or gold futures, often framed as insider expertise the contact is offering as a favor. Victims are walked through opening a crypto exchange account, transferring funds and moving them into Bitcoin, Ether, Tether or USDC before depositing into a platform designed to look like a real exchange, complete with a support desk and professional branding. Early on, the platform allows a real withdrawal — original deposit plus fabricated gains — specifically so the victim believes the arrangement works before being pushed toward a larger deposit.
The freeze, and the fee that never stops
The reversal comes at the moment a victim tries to take out a larger sum: the account locks, and a message appears demanding payment of a “tax” or “fee” before the funds can be released. The FBI’s advice runs against the natural instinct to pay whatever is asked to get the money moving again — paying does not unlock the account, and it does not lead to the funds being recovered.
Securities regulators describe the identical mechanic in a different wrapper. An SEC investor alert on relationship-based investment scams warns that a platform may also claim a “loan” must be repaid before any withdrawal, or direct payment to an unrelated business, such as a nail salon, rather than to the platform itself — a sign the money is headed somewhere with no connection to any real investment. Money wired outside the United States or paid in crypto toward a scheme that turns out to be fraudulent, the alert notes, is money that is unlikely to ever be recovered, however much is paid afterward to try to release it.
The recovery pitch that follows the loss
The scam does not always end with the frozen account. The FBI says victims are frequently contacted again afterward, this time by someone posing as a law enforcement officer or a fund-recovery specialist who claims, for a further fee, to be able to retrieve what was lost — a second deception layered on the first. The bureau’s guidance is to stop paying immediately, avoid tipping off the original scammer that federal investigators have been contacted, and preserve every transaction record: dates, payment types, wallet addresses, exchange names and any cryptocurrency transaction hashes, all of which help the bureau trace where the money actually went.
The bureau’s countermeasure is Operation Level Up, launched in January 2024 to proactively identify victims and warn them before they lose more money. Through December 2025, the initiative had notified 8,103 victims and is credited with an estimated $511.5 million in prevented losses; 77% of the people it contacted did not yet know they were being scammed. Total cryptocurrency fraud losses reported to the FBI’s Internet Crime Complaint Center reached more than $11 billion across 181,565 complaints in 2025, part of nearly $21 billion in overall internet-crime losses nationwide, up from roughly $18 billion the year before, according to the bureau’s 2025 annual report. Investment fraud broadly accounted for close to 49% of all scam-related losses in that report, and adults 60 and older saw their reported losses climb 37% to about $7.7 billion.
The FBI tells anyone who has already paid a “tax” or “fee” to try to unlock a frozen crypto account to stop sending money immediately and file a report at ic3.gov, the bureau’s Internet Crime Complaint Center, rather than wait to see whether the promised unlock ever arrives.
This article was produced with the assistance of AI and reviewed by Morning Overview editors prior to publication.
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