Key takeaways

Fake crypto investment platforms give themselves away in a few obvious ways.

Many use fake reviews, incorrect contact information and unrealistic promises to lure you in.

The best approach is a healthy dose of skepticism. Watching for these red flags will keep you safe while investing.

The burgeoning cryptocurrency market, with its lack of centralized authority and a constant flow of inexperienced users, makes digital assets a prime target for scammers. Fake crypto investment platforms are a common scam method, masquerading as useful services for crypto traders.

Before signing up for any crypto investment platform, it’s essential to learn the telltale signs of a scam. 

This article will detail what to watch out for and how to verify if a crypto investment platform is legitimate. These tips will teach you how to avoid crypto scams. 

Did you know? The FTC hosts a crypto scam detection guide that allows you to view common crypto scams, sorted by company name, scam type and other keywords. 

How to spot a crypto scam

Here are 10 crypto investment scam red flags to watch for when choosing a cryptocurrency investment platform.

1. Promising unrealistic returns

What to watch for: Fake crypto investment platforms will try to entice you with unrealistic promises, like “Make 1 Bitcoin in just a few days!” A legitimate crypto exchange won’t need to sell you with fake deals.

How to verify: The platform’s services should speak for themselves. None of them will give you a special advantage over the other, especially not one that can net you a Bitcoin just days after signing up. This is one of those prime crypto scam warning signs.

2. Fake team members

What to watch for: It’s easy to make an “our team” page on any website, let alone one offering a decentralized service. At a minimum, these pages should include photos, descriptions and links to LinkedIn or other verified social media platforms.

How to verify: Double-check team pages for legitimacy. Some scammers might also set up fake social media pages, so scan those for authentic interactions and delve deep into each team member’s project history.

3. Inconsistent white paper

What to watch for: Let’s be honest, most scammers won’t expect customers to read their project white paper. It’s probably something they threw together in ChatGPT or even plagiarized from a legitimate project.

How to verify: Read a project’s white paper in-depth and watch for legitimate use cases. Make sure the project solves a real problem, has a legitimate purpose and a realistic plan for the future. Don’t fall for buzzwords!

Did you know? Justin Sun, founder of Tron’s long-standing blockchain platform, has been accused of plagiarizing Ethereum’s white paper.

4. False endorsements

What to watch for: Just as it’s super easy to fabricate an “our team” page, scammers can place fake endorsements all over their home page. It’s as quick as copying and pasting a company logo like Forbes.

How to verify: Instead of trusting an exchange’s webpage, look up news releases and other proof of these supposed endorsements. Cointelegraph provides a directory of legit exchanges to help you identify fake crypto websites.

5. Lack of regulatory information

What to watch for: Now, regulatory requirements may vary depending on whether you’re looking at a centralized or decentralized platform, but if you’re looking at the former, know that centralized platforms cannot operate without regulatory approval from your government.

How to verify: Typically, you can check a government database to confirm if a platform is licensed. If it’s not, it may not be trustworthy. For example, the CEO of Tether (USDT) refuses to comply with the European Union’s Markets in Crypto-Assets (MiCA) framework. The company is known for its resistance to comply with regulatory policies, causing industry-wide suspicion.

6. Pushy sales tactics

What to watch for: Pushy sales tactics are a big red flag. If a platform reaches out to you through social media, such as through a direct message on X, Discord or Telegram, you can be sure it’s a scam. Scammers might claim to be an employee or crypto influencer ready to provide you with an “exclusive offer” or “limited time deal.” 

How to verify: A real exchange would never reach out to potential customers like this, especially via social media. Social media DMs are widespread crypto scam tactics.

Did you know? Some top crypto scams in 2024 were phishing attacks, rug pulls and fake airdrops. 

7. Fake location/contact info

What to watch for: Crypto investment platforms with a real product, even decentralized ones, will have contact information. Even Uniswap has a support email with which to get in touch. Centralized entities should also have addresses of their offices, ones that you can cross-reference with Google Maps for legitimacy purposes. 

How to verify: If a crypto investment platform is missing any contact information, consider that a red flag. This is an easy sign to miss.

8. Fake reviews

What to watch for: Tech products, blockchain-based and otherwise, feature user reviews front and center on their websites. That said, you can tell if these are real or manufactured. Keep an eye out for reviews with repetitive language and a lack of a critical eye, which only praise the platform. Glowing reviews are often fake, possibly even written by AI.

How to verify: Search for platform reviews on Reddit and other social media sites. Other users will tell you if the platform is legit or not. If a platform has no social media accounts, there is more reason to avoid it.

9. Fake airdrops or giveaways

What to watch for: Some fraudulent platforms may offer airdrops or giveaways as promotions to attract positive attention. However, participating in the fake airdrop might require inputting a wallet seed phrase or private key. 

How to verify: Legitimate airdrops will be announced on social media platforms like X, the platform’s blog on Medium or its official website. They’ll only ask for your wallet address, nothing more.

3. No fiat offramping

What to watch for: A crypto exchange with no fiat offramping means it’s not registered with local financial institutions. The platform might demand that you only work in crypto.

How to verify: If you sign up for an exchange and it immediately asks you to send crypto into your wallet on the platform instead of linking a payment method like a bank or card, this is a big red flag.

Cryptocurrency investment scams thrive on urging you to make rash decisions. It’s always best to be skeptical when choosing where to trade, invest or hold your crypto. Take your time, do your research, and double-check every piece of information a platform provides. These crypto fraud prevention tips will help keep you safe, protecting your assets and peace of mind. Use them to create a crypto scam checklist.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin’s fluctuating correlation with US equities is raising questions about its role as a global safe-haven asset during periods of financial stress.

Bitcoin (BTC) exhibited a strong negative correlation with the US stock market when analyzing the short-term, seven-day trailing correlation, according to new research from blockchain data provider RedStone Oracles, shared exclusively with Cointelegraph.

Bitcoin, S&P 500, 7-day rolling correlation. Source: Redstone Oracles

However, RedStone said that the 30-day indicator signals a “variable correlation” between Bitcoin price and the S&P 500 index, with the correlation coefficient ranging from -0.2 to 0.4.

This fluctuating correlation suggests that Bitcoin “doesn’t consistently function as a true hedge for equities” due to its lack of a strong negative correlation below -0.3, which is needed for “reliable counter movement during market stress,” the report said.

Bitcoin, S&P 500, 30-day rolling correlation, 1-year chart. Source: Redstone Oracles

Related: $1B Bitcoin exits Coinbase in a day as analysts warn of supply shock

The research suggests that while Bitcoin may not be a dependable hedge against stock market declines, it offers value as a portfolio diversifier.

This fluctuating dynamic signals that Bitcoin often moves independently from other assets, potentially offering additional returns while other assets are struggling. Still, Bitcoin has yet to mirror the safe-haven dynamics of gold and government bonds, RedStone suggests.

Related: Nasdaq-listed GDC plans to buy Bitcoin and TRUMP memecoin for $300M

Bitcoin needs to “mature” before decoupling from stock market

While Bitcoin is poised to grow into a safe-haven asset in the future, the world’s first cryptocurrency still needs to “mature” as a global asset, according to Marcin Kazmierczak, co-founder and chief operating officer at RedStone.

“Bitcoin still needs to mature before decoupling from stock markets,” Kazmierczak told Cointelegraph, adding:

“Increased institutional adoption will absolutely help — we’re already seeing this effect with corporate treasury investments reducing Bitcoin’s 30-day volatility and with BlackRock repetitively praising BTC as an asset in a portfolio.”

Meanwhile, Bitcoin will see growing recognition as a portfolio diversifier, with an annualized return of over 230% for the past five years, which “significantly outperformed” both stocks and traditional safe-haven assets, Kazmierczak said, adding that “even a small 1–5% Bitcoin allocation can meaningfully enhance a portfolio’s risk-adjusted returns.”

Source: Vetle Lunde

Meanwhile, Bitcoin’s declining volatility supports BTC’s growing maturity as a global financial asset. Bitcoin’s weekly volatility hit a 563-day low on April 30, a development that may signal more stable price action.

Bitcoin’s price volatility fell below the realized volatility of the S&P 500 and the Nasdaq 100, signaling that investors are increasingly treating Bitcoin as a long-term investment vehicle, Cointelegraph reported on May 13.

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An artificial intelligence training image data set developed by decentralized AI solution provider OORT saw considerable success on Google’s platform Kaggle.

OORT’s Diverse Tools Kaggle data set listing was released in early April; since then, it has climbed to the first page in multiple categories. Kaggle is a Google-owned online platform for data science and machine learning competitions, learning and collaboration.

Ramkumar Subramaniam, core contributor at crypto AI project OpenLedger, told Cointelegraph that “a front-page Kaggle ranking is a strong social signal, indicating that the data set is engaging the right communities of data scientists, machine learning engineers and practitioners.“

Max Li, founder and CEO of OORT, told Cointelegraph that the firm “observed promising engagement metrics that validate the early demand and relevance” of its training data gathered through a decentralized model. He added:

“The organic interest from the community, including active usage and contributions — demonstrates how decentralized, community-driven data pipelines like OORT’s can achieve rapid distribution and engagement without relying on centralized intermediaries.“

Li also said that in the coming months, OORT plans to release multiple other data sets. Among those is an in-car voice commands data set, one for smart home voice commands and another one for deepfake videos meant to improve AI-powered media verification.

Related: AI agents are coming for DeFi — Wallets are the weakest link

First page in multiple categories

The data set in question was independently verified by Cointelegraph to have reached the first page in Kaggle’s General AI, Retail & Shopping, Manufacturing, and Engineering categories earlier this month. At the time of publication, it lost those positions following a possibly unrelated data set update on May 6 and another on May 14.

OORT’s data set on the first Kaggle page in Engineering category. Source: Kaggle

While recognizing the achievement, Subramaniam told Cointelegraph that “it’s not a definitive indicator of real-world adoption or enterprise-grade quality.” He said that what sets OORT’s data set apart “is not just the ranking, but the provenance and incentive layer behind the data set.” He explained:

“Unlike centralized vendors that may rely on opaque pipelines, a transparent, token-incentivized system offers traceability, community curation, and the potential for continuous improvement assuming the right governance is in place.“

Lex Sokolin, partner at AI venture capital firm Generative Ventures, said that while he does not think these results are hard to replicate, “it does show that crypto projects can use decentralized incentives to organize economically valuable activity.”

Related: Sweat wallet adds AI assistant, expands to multichain DeFi

High-quality AI training data: a scarce commodity

Data published by AI research firm Epoch AI estimates that human-generated text AI training data will be exhausted in 2028. The pressure is high enough that investors are now mediating deals giving rights to copyrighted materials to AI companies.

Reports concerning increasingly scarce AI training data and how it may limit growth in the space have been circulating for years. While synthetic (AI-generated) data is increasingly used with at least some degree of success, human data is still largely viewed as the better alternative, higher-quality data that leads to better AI models.

When it comes to images for AI training specifically, things are becoming increasingly complicated with artists sabotaging training efforts on purpose. Meant to protect their images from being used for AI training without permission, Nightshade allows users to “poison” their images and severely degrade model performance.

Model performance per number of poisoned images. Source: TowardsDataScience

Subramaniam said, “We’re entering an era where high-quality image data will become increasingly scarce.” He also recognized that this scarcity is made more dire by the increasing popularity of image poisoning:

“With the rise of techniques like image cloaking and adversarial watermarking to poison AI training, open-source datasets face a dual challenge: quantity and trust.”

In this situation, Subramaniam said that verifiable and community-sourced incentivized data sets are “more valuable than ever.” According to him, such projects “can become not just alternatives, but pillars of AI alignment and provenance in the data economy.“

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