Investment fraud caused $4.57 billion in reported losses in 2025, making it the costliest fraud category. From crypto rug pulls to classic Ponzi schemes repackaged with AI branding, investment scams exploit the universal desire to grow wealth. Median individual loss: $9,600.
Been pitched an investment? Paste the pitch or website into IsThisAScam.to to check for known fraud patterns.
Step 1: Verify Broker Registration
- FINRA BrokerCheck (brokercheck.finra.org) — registration, licenses, complaints
- SEC EDGAR (sec.gov) — fund registrations
- SEC Adviser Search (adviserinfo.sec.gov) — registered investment advisers
- State regulators: nasaa.org links to every state
Received an investment offer?
Paste it here — we detect pump-and-dump, Ponzi, and fake return scams.
Free · No signup required · Cmd+Enter to scan
Step 2: Understand the Structure
Demand clear answers: what exactly is the investment, how does it generate returns, what are the fees, how liquid is it, what are the risks? Vague answers are evasion.
Step 3: Spot the Red Flags
- Guaranteed returns: No legitimate investment guarantees returns
- Pressure to act quickly: "Opportunity closes Friday"
- Recruiting new investors: If returns depend on recruitment = pyramid/Ponzi
- Unregistered securities: If not registered with SEC = illegal
- Complex/secret strategies: Bernie Madoff's "complexity" was covering nonexistent strategy
Cryptocurrency-Specific Checks
- Check the token on CoinGecko/CoinMarketCap
- Verify smart contract audits (CertiK, OpenZeppelin)
- Check the team — anonymous = higher risk
- Examine tokenomics — insiders holding large supply = rug pull risk
- Check liquidity — can you actually sell?
Real Examples
Multiple AI trading bot platforms in 2025-2026 promised 2-5% daily returns. Investors saw fake dashboard returns, could withdraw small amounts initially. Large withdrawals triggered account freezes. Estimated losses: $800+ million.
Due Diligence Checklist
- Broker/adviser registered with FINRA or SEC?
- Can you explain how it generates returns?
- Returns realistic, not guaranteed?
- Pressure to invest quickly?
- Returns depend on recruiting?
- Security registered or exempt?
- Independent reviews exist?
- Does IsThisAScam's 6-layer analysis flag associated sites?
See: website safety and psychology of scams.
Received something suspicious? Check it now for free →