How to Spot and Report Fraud
Crypto Ponzi Schemes on the Rise
The rise in popularity of cryptocurrency has created fertile ground for fraud, including Ponzi schemes. Crypto Ponzi schemes function similarly to traditional Ponzi schemes by misleading investors into believing their returns are generated from legitimate trading or business activities. In reality, the fraudulent cryptocurrency companies use new investor funds to pay earlier investors, eventually leading to collapse when recruitment slows.
The SEC remains committed to rooting out these crypto frauds. On February 21, 2025, SEC Commissioner Hester M. Peirce stated:
[T]he Commission’s efforts continue unabated to combat fraud involving securities, including crypto assets that are securities or that…
