Fraud of the Month: Crypto Fraud Takes Center Stage in February 2026

While scams were the main event during the January holiday season, February seems to be the hotspot for crypto fraud cases. From romance-driven investment fraud to impersonation schemes and massive criminal crypto networks, these cases show how crypto-related scams combine psychological manipulation with increasingly sophisticated operations. 

As seen in Sumsub’s new 2025-26 Fraud Report, crypto fraud still remains in the top 5 fraud types as fraudsters continue to launder funds from scams and exploit platforms with weak KYC.

Here are three crypto fraud stories that stood out from the rest in the news over the past month.

👰A matrimony app leads to an $100K crypto scam

A 42-year-old widower in Hyderabad, India, lost ₹86 lakh (around $100,000) after getting duped by “Preeti Chopra,” a person who claimed to be a successful cryptocurrency trader on the matrimony app the widower was using.

The fraudster connected with the man on Telegram and gradually built trust with him, ending up convincing him to invest in what seemed like a legit crypto trading platform. At first, the man saw impressive results and profit, which encouraged him to keep investing in crypto. However, when he tried to withdraw the funds, the platform demanded additional “VIP upgrade” fees and taxes from him, and eventually blocked his access to the platform entirely.

Authorities later confirmed that the platform as a whole was fake and part of a broader online investment scam. This case follows a common “pig-butchering” pattern, where scammers build personal relationships with the victim before convincing them to transfer funds to fraudulent crypto platforms.

🚓Fake police officers used in a crypto deal robbery

In another incident, what began as a peer-to-peer crypto deal bizarrely and quickly turned into a staged police raid.

The victim responded to a social media ad that was offering USDT cryptocurrency for sale, and arranged to meet the crypto sellers in person in order to complete the transaction. Nothing seemed off, since meetings like these are not unusual in informal crypto markets, where buyers and sellers sometimes make cash deals over exchanges.

However, when the buyer arrived with the money, the situation took an unexpected turn: several men suddenly appeared, identifying themselves as police officers. They claimed the transaction that was supposed to take place was illegal and announced that everyone present was under investigation. Before the victim could react, the supposed officers took the cash as “evidence” and left the scene. It only later became clear that the entire operation had been staged and that it was all a part of a crypto scam.

The fake raid was part of a coordinated robbery planned by a group that had set up the crypto sale as bait. Authorities later arrested several suspects connected to the scheme, uncovering that the group used the urgency of a supposed police operation to prevent the victim from questioning what was happening.

📈$580 million seized from global crypto scam networks

In one of the largest enforcement actions of the month, the US authorities announced they had frozen and seized more than $580 million in cryptocurrency assets that were tied to international scam networks.

The funds in question were linked to transnational criminal organizations running large-scale “pig-butchering” scams. They had been stolen by Chinese transnational criminal organizations (TCOs), which employ cryptocurrency investment frauds and various confidence schemes to rob their victims of their life savings. The fraudsters have been using US internet and social media platforms to target both American and global victims.

Investigators estimate that these scams steal billions of dollars each year, so the seizure of these funds marks a significant step in disrupting the financial infrastructure behind these fraud operations.

Crypto fraud seems to be evolving as quickly as the crypto market itself, with social engineering cases, fake trading platforms that are a major tool for stealing funds from unassuming individuals, and global criminal networks that industrialize crypto fraud on a large scale. 

For crypto platforms and fintech firms, going beyond surface-level checks is the best line of defense against being defrauded—along with transaction monitoring, analyzing suspicious behaviours, cross-border cooperation, and above all, staying vigilant in detecting suspicious activity.

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