How do you spot a fake crypto exchange?

A fake crypto exchange is a website or app built to look like a real trading platform. Deposits go straight to the scammers, and the profits on screen are invented. The site often works smoothly until the moment someone tries to take money out.

How does a fake crypto exchange scam work?

Most of these scams begin with a message, not a search. The CFTC says most start with unsolicited contact on social media or messaging apps. A new friend, romantic interest or "investment manager" offers to help, and coaches the victim to open an account on a particular site. This long con is often called pig butchering.

The FBI says the fake sites let victims watch their balances grow quickly, which encourages larger deposits. When the victim tries to withdraw, they are told to pay income tax or other fees first. Those payments are lost too. Eventually the site closes or the contact stops replying.

Often the victim is told to buy crypto on a legitimate exchange and then send it to the fake one. The CFTC notes that this route skips bank fraud protections, because blockchain transfers cannot be reversed.

How do you identify a fake crypto exchange website?

The CFTC lists ten signs of a scam trading website. The main ones:

• No registration. In the US, a crypto platform should be registered with FinCEN as a money services business, and firms offering futures or forex must be registered with the CFTC. Registration alone does not prove a site is honest.
• A young or lookalike domain. A site claiming years of history but created recently, checked at lookup.icann.org, is a red flag. So is an address that resembles a well-known brand. The FBI warns of misspelled or slightly altered addresses that copy real exchanges.
• No real address or phone line. Scam sites often list only chat apps or contact forms.
• Returns tied to deposit size. Promised returns that rise with each deposit, or paid "upgrades," are tactics to extract more money.
• Sloppy pages and fake praise. Broken links, poor grammar, awards from unknown bodies and glowing testimonials are common.

The FTC adds that promises of guaranteed profits or zero risk are a giveaway. As the agency puts it, "Nobody can make those guarantees." The FBI also advises checking web addresses carefully and avoiding investment apps that cannot be verified. Related copycat tricks are described in phishing and wallet drainers.

How do you report a fake crypto exchange?

In the US, reports can go to the FBI's Internet Crime Complaint Center at ic3.gov, the FTC at ReportFraud.ftc.gov, the CFTC at cftc.gov/complaint and the SEC at sec.gov/tcr. The CFTC also publishes a RED list of firms that appear to need registration but are not registered.

The FBI asks for the scammer's contact details and usernames, plus transaction dates, amounts and wallet addresses. The real exchange used to send the money should be told as well. The full steps are in what to do if you are scammed, and other patterns are covered in common crypto scams.