Crypto investment scam refund — fake exchanges, Telegram groups, copy-trading.

Cryptocurrency investment fraud is the fastest-growing APP fraud category by value in the UK. The scam takes many forms — fake exchanges, Telegram “signal” groups, AI copy-trading platforms — but the legal framework is now clear. If you made bank transfers to fund the investment, the law entitles you to a refund.

Can I get my money back from a crypto investment scam?

If you funded a crypto platform via a UK bank transfer, that bank transfer is covered by the PSR Mandatory Reimbursement Scheme (in force from 7 October 2024) up to £85,000. If you used a credit card to purchase crypto that was then stolen, Section 75 of the Consumer Credit Act 1974 may apply for purchases of £100–£30,000. Crypto already on a third-party blockchain is harder to recover, but the bank transfer that funded the platform is a separate and claimable loss.

The platform said it was FCA-regulated. How do I check?

Check the FCA Register at register.fca.org.uk. Enter the firm's name or registration number. If it does not appear, or if the contact details on the Register differ from those used by the platform, it may be a clone firm. Also check the FCA Warning List at register.fca.org.uk/s/fca-unauthorised. FCA-regulated firms do not cold-call investors or promise guaranteed returns.

My withdrawal request was blocked and they said I owe tax. Is this a red flag?

Yes — this is one of the most reliable red flags of a crypto investment scam. Legitimate platforms do not require you to pay "tax" or "fees" before releasing your own funds. Any withdrawal block followed by a fee demand is a near-certain indicator of fraud. Stop all payments immediately and report to Action Fraud and your bank.

I sent crypto directly from my own wallet to the scammer's address. Can I claim?

Blockchain transactions are generally irreversible. However, if the crypto was purchased using a UK bank transfer or credit card, you may be able to claim the purchase payment — not the crypto itself. If the "investment" was initially presented as happening through a platform where you deposited fiat money that was then supposedly converted, the fiat deposits may be claimable as APP fraud.

The Telegram group had thousands of members and seemed legitimate. Does that count in my favour?

Yes. The sophistication of the operation — a large Telegram community, professional-looking charts, and testimonials from apparent members — is evidence that the fraud was elaborate and credible, not evidence that you were reckless. The FOS takes account of how convincing the fraud presentation was when assessing whether a victim acted reasonably.

What if the investment platform was based outside the UK?

The PSR Mandatory Reimbursement Scheme covers payments sent via Faster Payments or CHAPS from a UK bank to a UK-domiciled receiving account. If your UK bank transferred funds to a UK account (even if the platform claimed to be based abroad), the scheme applies. If the funds went directly to an overseas account via international wire, the scheme does not apply but your bank may still have obligations under its own fraud policies and the Financial Ombudsman's "fair and reasonable" jurisdiction.

Scam Refund · Scam Types

Crypto investment scam refund — fake exchanges, Telegram groups, copy-trading.

The landscape of crypto investment fraud

UK Finance data shows investment fraud losses — of which crypto is now the dominant component — exceeded £100 million per year in recent years, with average individual losses among the highest of any APP fraud type. Action Fraud receives thousands of crypto investment fraud reports annually, but estimates suggest the true figure is two to three times higher due to under-reporting driven by embarrassment and the misconception that crypto losses are untreatable.

Crypto fraud exploits two factors: the complexity of the underlying technology (which makes it hard for victims to distinguish genuine platforms from fraudulent ones) and the legitimate possibility of outsized returns from real crypto markets (which makes implausible gains seem just plausible enough). The scams are designed by people who understand both dynamics.

The main crypto fraud types

Fake cryptocurrency exchanges and trading platforms

A sophisticated website mimics a legitimate crypto exchange, complete with live price feeds (often manipulated), account dashboards, and customer support. You deposit money, usually by bank transfer to a UK account that forwards it onwards. Your “portfolio” grows on screen. When you try to withdraw, fees multiply until you stop paying.

Telegram pump-and-dump and signal groups

You are invited into a Telegram group promising insider trading signals or early access to new tokens. The group appears active with thousands of members (often bots). You are directed to buy a specific token, which rises briefly as the scammers sell their holdings at the inflated price, then crashes to near-zero.

Copy-trading and AI-trading platforms

A scammer (sometimes introduced via social media, sometimes via a romance connection — as in

) claims to have access to an algorithmic or AI trading system with verified returns. You invest money that is “copy-traded” on the platform. The platform is fake. The returns exist only on screen.

NFT and token launch fraud

A new NFT collection or cryptocurrency token is promoted via social media, often endorsed by fake or hacked celebrity accounts. Early investors buy in, prices are artificially inflated by the creators, and the creators then liquidate their holdings and disappear (a “rug pull”). Influencer-promoted scam tokens are a variant of this.

Clone firm crypto brokers

Scammers create a website designed to look like a real, FCA-regulated crypto broker or investment firm. They use the real firm’s name, registration number, and contact details from the FCA Register, but substitute fraudulent account details. This is

and is one of the most credible variants.

Red flags to recognise

• The platform is not on the FCA Register at register.fca.org.uk, or the details on the Register do not match.
• You are guaranteed returns or shown historical returns that seem unrealistically consistent.
• The investment opportunity came via a cold contact — an unsolicited social media approach, a Telegram invitation, or a “wrong number” message.
• You are asked to send funds by bank transfer to a personal account or a small business rather than to a regulated broker.
• Withdrawal requests trigger demands for fees, taxes, or compliance charges.
• Customer support pressures you to invest more rather than helping you understand your existing investment.
• The platform’s website was registered recently or has thin social media presence.

What to do in the first 24 hours

• Stop all further payments.
• Do not pay any withdrawal fee, tax, or compliance charge.
• Screenshot everything:
• the platform interface, your account balance, withdrawal messages, all communications with the scammer, and bank statements showing your deposits.
• and report all payments as APP investment fraud. Ask for payment recall on any recent transfers.
• Report to Action Fraud
• at actionfraud.police.uk and obtain a crime reference number (CRN).
• Check the FCA Warning List
• at register.fca.org.uk/s/fca-unauthorised and report the platform if it appears there or if it is absent from the Register.
• Do not contact any recovery agent
• who promises to retrieve your funds for an upfront fee. This is a second scam.

Your legal refund pathway

Bank transfers from a UK account made to fund a fraudulent crypto platform are Authorised Push Payment (APP) fraud — specifically “investment fraud” under the PSR Mandatory Reimbursement Scheme in force since 7 October 2024. Your sending bank must reimburse you up to

applies to non-vulnerable consumers. The bank has five working days to refund or write with reasons.

The bank’s only defence is gross negligence. The FCA’s Consumer Duty (Principle 12) requires banks to take active steps to detect and prevent investment fraud, not merely to warn customers. Ignoring an FCA-regulated firm’s name (as appears on the FCA Register) is not gross negligence if the fraudster used that name convincingly. The Payment Services Regulations 2017 regulation 77 also places obligations on the sending bank to identify suspicious payment patterns.

If you used a credit card to purchase crypto that was then transferred to a fraudulent platform, Section 75 of the Consumer Credit Act 1974 gives a separate claim against your credit card issuer for purchases of £100 to £30,000. The Limitation Act 1980 section 5 gives six years for a civil claim, but the PSR scheme’s 13-month window applies to bank claims.

• Report to bank and Action Fraud.
• Within 5 working days:
• Bank must reimburse or provide written reasons.
• Bank must issue a final response letter (FCA DISP rules).
• Within 6 months of final response:
• Escalate to the Financial Ombudsman Service.
• Within 13 months of the last payment:
• Must bring the claim to the bank under the PSR scheme.

How banks refuse — and how to push back

“Crypto investments are inherently high-risk and unregulated — you should have known the risks.”

General crypto volatility risk is not the same as the risk of being defrauded by a fake platform. The question for the PSR scheme is not whether crypto is risky, but whether your payment was obtained by deception. The FOS has consistently found that victims of fake crypto platforms were defrauded, not merely exposed to normal investment risk.

“The FCA does not regulate crypto, so we have no obligation to warn you.”

The FCA’s Consumer Duty (Principle 12) applies to the bank’s conduct regardless of whether the underlying investment is regulated. The bank has an obligation to act in its customers’ best interests and to take reasonable steps to detect unusual payment patterns consistent with investment fraud. Payment Services Regulations 2017 regulation 77 reinforces these duties.

“You made multiple large payments over several months without querying them with us.”

Banks are required to have systems to detect unusual payment patterns consistent with investment fraud. If the bank processed multiple large payments to the same payee over months without intervention, that may itself be a failing on the bank’s part. The FOS has ordered refunds in cases where the bank’s own systems should have flagged the transactions.

Read our guides on the

. If your fraud involved a romantic relationship, see our

. If the platform mimicked a real FCA firm, see our

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Not legal advice. This guide is for general information only. For advice specific to your circumstances, consult a regulated legal professional or contact Citizens Advice.