Rise of Crypto Scams in 2025: How Lack of Knowledge and Social Engineering Make Users Easy Targets

Cryptocurrency exchange MEXC has released a detailed report on the sharp rise in fraudulent activity on its platform in the first quarter of 2025. According to the data, there was a 200% spike in fraudulent trading activity between January and March 2025 compared to the previous quarter 1 5 6 .

The scale and nature of fraud

A total of 80,057 organised fraud attempts were identified , carried out by over 3,000 coordinated fraud syndicates . The main types of fraudulent activity included:

Market manipulation to distort prices and create false demand or supply.
Wash trading , where trades simulate activity but have no real economic basis.
Use of automated trading bots that exploit users through unfair execution of trades and bypassing control systems.
The creation of so-called “educational” trading groups that are actually coordinated efforts to mislead and manipulate users 1 3 5 7 .

Geography of fraudulent activity

The most affected regions were:

Region	Number of suspicious accounts	Activity growth (%)
India	about 27,000	—
Commonwealth of Independent States (CIS)	6 404	245%
Indonesia	5 603	1 303%

India leads in absolute number of fraudulent accounts, while Indonesia has seen a record increase in suspicious activity, up more than 13-fold from the previous quarter 1 3 5 7 9 .

Reasons for the increase in fraud

A major factor contributing to the surge in fraud is the low level of financial and cryptocurrency literacy among new users, especially in developing countries. Many investors enter the market unaware of common scams and financial engineering traps, leaving them vulnerable to attackers 1 5 7 .

In addition, scammers actively use social engineering – psychological manipulation aimed at deceiving users. In 2025, unlike 2021, when hacks in the DeFi sector dominated, the main threat is related to manipulation through social networks, messengers and “educational” groups that disguise themselves as legitimate trading communities and financial experts 1 5 7 .

Control measures and recommendations MEXC

In response to the growing threats, MEXC has strengthened risk controls and implemented a multi-layered monitoring system that combines automated anomaly detection, expert analysis and regional escalation procedures. Accounts with suspicious activity are temporarily blocked or restricted in accordance with international anti-money laundering standards (FATF) 6 10 .

In addition to technical measures, MEXC emphasizes the need for educational programs and raising user awareness of types of fraud. The exchange launches safe trading campaigns and creates financial protection funds for affected customers 7 .

Related incidents in the crypto industry

The rise in fraud is not limited to one platform. In April 2025, a case was uncovered where an elderly person lost $330 million in Bitcoin due to social engineering. The attackers exchanged some of the stolen funds for Monero (XMR), which caused the coin to skyrocket by 50%. Thanks to the efforts of security teams, including Binance Security, some of the funds were frozen 1 .

In May 2025, crypto exchange Coinbase reported a data breach of up to 70,000 customers, which also involved ransomware attempts and potential risk to users. Although funds and private keys were not compromised, the exposure of personal information puts investors at risk of physical security 1 .

In summary, the MEXC Q1 2025 report demonstrates a significant increase in fraudulent activity in cryptocurrency trading , particularly in India, the CIS, and Indonesia, and highlights the importance of comprehensive anti-fraud measures, including technical solutions and educational initiatives. The rise of social engineering as a method of deception requires increased attention and vigilance from all market participants.

What are the main types of fraud detected on MEXC in the first quarter of 2025?

The main types of scams identified by the MEXC cryptocurrency exchange in the first quarter of 2025 include:

Market manipulation aimed at artificially creating demand or supply in order to distort prices.
Wash trading , where trades simulate activity without real economic substance.
Use of automated trading bots that exploit users through unfair trade execution.
Coordinated actions of fraudulent syndicates , including money laundering and market manipulation.
Social engineering scams where criminals mislead users through “educational” trading groups and false investment advice.
Phishing attacks and transferring users to fictitious trading platforms .
Manipulation of counterfeit digital tokens .

These schemes are fueled by low levels of financial and cryptocurrency literacy among new users, especially in regions such as India, the CIS, and Indonesia, where the highest number of suspicious accounts have been recorded 1 2 5 6 7 .

Why India is the leader in suspicious crypto scam accounts

India has become the leader in terms of suspicious accounts in crypto scams on the MEXC exchange in Q1 2025 due to several key reasons:

The rapid rise of cryptocurrencies in India has attracted a large number of new users, many of whom have low levels of financial and cryptocurrency literacy. This has created fertile ground for scammers who are actively using social engineering and phishing attacks to deceive inexperienced investors 1 2 4 .
Phishing attacks and redirecting users to fake trading platforms , as well as manipulation of fake tokens, are common in India , leaving users vulnerable to fraudulent schemes 1 2 .
The high activity of fraud syndicates operating out of India is also explained by the fact that the cryptocurrency market in the country is growing rapidly, but at the same time, regulation and user protection remain underdeveloped, which reduces the barriers for criminals 1 4 .
Additionally, India has seen major incidents of theft and hacking attacks on crypto exchanges, further highlighting the vulnerability of the market and fueling fraudulent activity 3 .

Thus, India’s leadership in the number of suspicious accounts is due to a combination of the rapid growth of the crypto industry, insufficient user awareness, and the active activities of organized crime groups using a variety of fraudulent schemes 1 2 4 .

How Social Engineering Is Fueling Fraudulent Activity in Crypto

Social engineering is fueling the growth of fraudulent activity in the cryptosphere by manipulating the human factor, the most vulnerable link in the security system. Unlike technical hacks, fraudsters use psychological techniques to trick users into voluntarily revealing sensitive information, passwords, or private keys to crypto wallets.

Key mechanisms of social engineering in the cryptocurrency space include:

Gaining trust and impersonating authority figures – Scammers pretend to be exchange support staff, well-known crypto influencers, or community members, using fake profiles and verification marks to lull victims into a false sense of security 1 .
Creating a sense of urgency and fear – attackers send messages about an alleged hacked account or the urgent need to confirm identity, so that the victim acts impulsively and does not have time to check the information 1 4 .
Exploiting greed and the desire for quick profits – promises of “exclusive” lucrative deals and huge profits lead users to make risky decisions without proper verification 1 .
Using phishing and fake websites – victims receive links to fraudulent resources where they are asked to enter personal data or seed phrases, which leads to theft of funds 2 3 .
Distribution of malware via social networks and instant messengers – under the guise of fake antiviruses or “educational” materials, users are offered to download programs that steal data 5 .
Disorientation and information noise – a large amount of conflicting information and time pressure cause loss of vigilance and erroneous actions 4 .

In the cryptocurrency space, social engineering is especially dangerous because transactions are irreversible and the decentralized nature of the blockchain makes it difficult to recover stolen funds. Many users’ lack of in-depth knowledge of crypto security makes them easy targets for such attacks 1 3 .

Thus, social engineering is one of the main factors fueling the growth of fraud in the crypto sphere and requires users to become more aware and cautious when interacting with crypto services.

What measures is MEXC taking to combat organized fraud syndicates?

Cryptocurrency exchange MEXC is taking comprehensive measures to combat organized fraud syndicates that carried out more than 80,000 fraud attempts in the first quarter of 2025. Key measures include:

Multi-layered risk control system : a combination of automated real-time anomaly detection, expert analysis and regional escalation procedures. This enables suspicious order patterns and account behaviour to be identified, after which suspicious accounts are temporarily blocked or restricted in accordance with international anti-money laundering standards (FATF) 5 6 .
Enhanced monitoring of small cap assets and trading bots that are often used for market manipulation and wash trading 5 .
Updating the Risk Management Guidelines and launching educational programs in vulnerable regions (India, CIS, Indonesia) aimed at increasing financial literacy and awareness of users about common fraudulent schemes 1 5 .
Initiatives to protect users financially , including the MEXC Guardian Safe Trading campaigns and the creation of the MEXC Guardian Fund, which helps individual investors who have suffered fraud 5 .
Anti-phishing code feature that allows users to set a unique code that will be included in official emails from the exchange, which helps to recognize fake messages and prevent phishing attacks 3 .
Verification of employees and official communication channels through the MEXC Verify service so that users can verify the authenticity of contacts and avoid communicating with scammers posing as exchange representatives 3 .
Collaborating with law enforcement and blockchain companies to investigate and freeze funds stolen from fraudulent activity and to return assets to victims 2 6 .

Thus, MEXC combines technical means of fraud detection and prevention with educational and legal support, which allows it to effectively counter organized syndicates and protect its users from financial losses.

How Lack of Cryptocurrency Education Increases Your Risk of Being Scammed

Lack of education about cryptocurrencies significantly increases the risk of becoming a victim of scammers for a number of reasons:

Lack of knowledge about the basic principles and mechanisms of cryptocurrency trading means that many users are unable to recognize fraudulent schemes such as phishing, fake trading or market manipulation. This makes them vulnerable to fraud and loss of funds 2 3 .
Lack of understanding of risks and safety rules leads newcomers to trust dubious “educational” groups and scammers who disguise themselves as experts, offering free courses or “secret” strategies for making money quickly. Such groups are often coordinated fraud syndicates that use social engineering to gain trust and then deceive 2 6 .
The desire for quick profits and lack of critical thinking push inexperienced investors to make risky decisions and invest in dubious projects without checking their legitimacy. Fraudsters exploit this by promising “easy money” and “exclusive opportunities,” which is especially relevant for young people and beginners 1 5 .
Low financial literacy and lack of risk management skills lead to users not protecting their personal data and keys to crypto wallets, which gives fraudsters access to their assets 2 3 .
Lack of information about protection methods and signs of fraud prevents users from recognizing the threat in time and taking action, which contributes to the growth of successful social engineering attacks and other fraudulent schemes 7 9 .
Children and teenagers are particularly vulnerable , as despite their interest in cryptocurrencies, they often do not receive sufficient guidance and support, increasing their risk of becoming victims of fraudsters 1 8 .

Therefore, the lack of proper education and awareness in the cryptocurrency sphere creates favorable conditions for fraudsters, increasing their ability to use psychological manipulation and technical tricks. Increasing the level of knowledge and critical thinking among users is a key factor in reducing risks and protecting against financial losses.

How Lack of Knowledge About Cryptocurrencies Increases Your Chances of Becoming a Victim of Scammers

Lack of knowledge about cryptocurrencies significantly increases the chances of becoming a victim of fraudsters for the following reasons:

Lack of understanding of the principles of cryptocurrency operation and the features of blockchain transactions , which are irreversible and have no refund mechanisms, leads to the fact that users cannot recognize fraudulent transactions in time and cancel them 2 .
Lack of project evaluation skills and understanding of risks makes beginners trust dubious investment offers with promises of quick and high profits, which is a typical fraudulent scheme 1 2 5 .
Lack of security awareness leads to personal data and private keys being shared with attackers, such as through phishing sites, fake apps or fraudulent support services, which opens up access to crypto wallets and assets 1 2 3 6 .
Susceptibility to social influence and manipulation – scammers use psychological techniques (social engineering) to create the illusion of trust through “educational” groups, fake celebrity endorsements and urgent offers, which is especially effective against inexperienced users 1 2 3 5 .
The lack of critical thinking and financial literacy contributes to the fact that victims do not check the legitimacy of projects and do not realize that the transfer of funds to the fraudster’s crypto wallet is practically irreversible 1 2 7 .
The complexity of technology and regulatory gaps create an additional barrier to understanding and protection, as many users do not know how to properly use two-factor authentication, are unaware of the risks of SIM swapping and other technical attacks 2 7 .

Thus, the lack of education and experience in the cryptocurrency sphere makes users an easy target for scammers who are constantly improving their schemes using technical and psychological tricks. Increasing the level of knowledge and awareness is a key factor in reducing the risk of becoming a victim of crypto fraud 1 2 5 .