Crypto Scams Top Fraud Complaints, Panelists Warn

At the 2025 FINRA Annual Conference, regulators and industry professionals gathered to discuss the evolving landscape of financial fraud schemes, with a particular focus on those involving cryptocurrency. The session, titled “Mitigating Impacts of Fraud and Scams Targeting Customers,” featured Christine Kieffer, Senior Director of Investor Education at FINRA; Brooks Brown, Senior Director at FINRA’s High-Risk Registered Representative Unit; Tara Ambrose, Senior Financial Fraud Ombudsperson at the Minnesota Department of Commerce; and Bismarck Prado, Director of Fraud & Senior Investor Protection at Commonwealth Financial Network.

Kieffer highlighted the growing complexity of fraud threats and the increasing overlap between investment fraud and crypto scams. She noted that investment and cryptocurrency scams are among the top three types of complaints, according to FTC data. Ambrose described how many frauds begin with tech support scams, where fake antivirus pop-ups prompt victims to call a number, leading to an elaborate ruse involving phony bank fraud agents. Prado detailed impersonation scams that manipulate victims through staged calls, allegedly from companies, and ask victims to stay on the phone, drive to Bitcoin ATMs, and deposit funds. The victims are also told not to tell anyone, while the scammers create urgency by claiming the victim’s identity is tied to criminal activity.

Brooks Brown emphasized how new tools are changing scam tactics. He pointed to AI-generated phishing materials and deepfake videos, stating that scheme techniques are just that much more effective because of the proliferation of the toolkits and AI applied on top of it. Panelists emphasized that these scams are not limited to seniors. Ambrose noted that midlife professionals, entrepreneurs, and tech-savvy investors are often among the hardest hit. She mentioned that the biggest losses she has seen in her current role at her past firm involved cryptocurrency investments, where sophisticated investors were convinced to move money out of a legitimate crypto wallet into a specialized trading platform that was fake.

To combat such threats, the panel recommended proactive strategies. Brown urged firms to utilize FINRA Rule 2165, which allows temporary holds on suspicious account activity. He also pointed to the FINRA Securities Helpline for Seniors, which has helped recover over $9 million since its launch without opening formal investigations. As fraud tactics become more technologically advanced, traditional safeguards are losing ground. Real-time interventions are now essential as scammers exploit tools like AI-generated personas and decentralized platforms to bypass institutional checks.

The panel stressed that financial crime prevention can no longer sit solely with compliance teams. It now requires coordination across fraud detection, client services, tech platforms, and even telecom providers. Many frauds rely on real-time communication, such as phone calls and text messages. Telecom providers can help identify spoofed numbers, block known scam calls, and support law enforcement investigations. Smaller firms are encouraged to use “smart friction” tactics, such as additional verifications before crypto withdrawals, and provide clear client alerts. They can also partner with third-party monitoring services that flag unusual behavior.