Introduction
In the aftermath of recovering over $1.1 million from a crypto exit scam, we’ve spent time analyzing what warning signs were missed — and how they could’ve been caught early. Investors often feel embarrassed when they fall victim to scams, but many crypto frauds are designed to mimic legitimacy with shocking precision.
In this post, we share 5 clear red flags that every investor should watch for. Whether you’re a seasoned trader or someone new to digital assets, these insights could protect you from losing everything.
1. “Guaranteed” Returns or Fixed Monthly Payouts
Any promise of guaranteed profits in a decentralized, volatile market is a red flag. In the exit scam we exposed, the platform promised a “stable 18% monthly return” through arbitrage. They even showcased fake trading bots and simulated profit dashboards.
✅ What to do: Ask for audited results and question any fixed return — especially if it’s higher than what legitimate markets offer.
2. Anonymous or Unverified Founders
If you can’t trace the leadership team behind a project — or their LinkedIn profiles seem fake or newly created — run. In our case, the alleged CEO had a profile picture that turned out to be AI-generated.
✅ What to do: Search for past projects they’ve worked on, real speaking events, or verifiable business ties. Lack of a real history is a huge red flag.
3. Lack of Regulatory Transparency
One of the biggest issues in the case we litigated was the project’s avoidance of compliance. There were no terms of service, no SEC filings, and no KYC or AML compliance.
✅ What to do: Check if the company is registered with regulatory bodies or has any legal disclaimers. If they avoid regulations, there’s a reason.
4. Social Media “Buzz” with No Real Press Coverage
In crypto scams, hype is used to pressure people into investing. Telegram groups with admins hyping “price pumps,” YouTube reviews by paid influencers, and Discord channels full of spammed emojis should make you skeptical.
✅ What to do: Look for unbiased press from major crypto news sites or reputable blockchain analysts — not just influencer hype.
5. Difficult or Blocked Withdrawals
Scams tend to collapse around the time withdrawal requests rise. In our case, the fraudsters claimed “network congestion” and “security upgrades” to delay payments before vanishing altogether.
✅ What to do: Always test small withdrawals before going all in. If there are delays — even minor ones — that’s a warning.
Conclusion
Scams are evolving. So must our awareness. At Lex Firm Global, we’re committed not just to recovering stolen assets — but also to helping investors protect themselves before the damage is done.
If you’ve seen any of these signs or are unsure about a project you’re involved with, reach out. Early legal intervention is the best defense against long-term loss.