Investment fraud in 2025 was on track to continue the steady year-to-year increase that has existed since 2020. Americans lost $3.5 billion in investment fraud and scams in just the first half of 2025 and that figure is projected to rise above the $5.8 billion in losses reported for 2024.1
Crypto scams remain the second-largest source of funds for scammers behind bank transfers, with the first half of 2025 seeing scammers collect $959 million in cryptocurrency.2
The U.S. Securities and Exchange Commission’s (SEC) hosts a website dedicated to educating investors. It is Investor.gov 3 This site includes a listing of 14 common types of investment fraud and gives an overview of each.4
1. Advance Fee Fraud
When a person or company asks you to pay a fee up front prior to receiving any proceeds, money, stock or warrants you may be dealing with this type of fraud. An example of this would be when you receive a direct mail solicitation that falsely claims that you have won, or soon will win, cash or valuable prizes or otherwise come into great fortune if you complete a form and submit a payment of $15 to $55 via mail. That exact scheme netted fraudsters more than $18 million in the United States in 2015.5
2. Binary Options Fraud
The Investor.gov website stated that a binary option “is a type of options contract in which the payout depends entirely on the outcome of a yes/no proposition and typically relates to whether the price of a particular asset will rise above or fall below a specified amount.
A binary option does not give the holder the right to buy or sell the specified asset. When the binary option expires, the option holder receives either a pre-determined amount of cash or nothing at all.”6
The website further reveals that the internet-based trading platforms where these assets are often offered don’t necessarily comply with U.S. regulatory requirements. The Commodities Futures Trading Commission recommends checking out the registration status and disciplinary history of a derivatives professional or company by using a free tool – BASIC.7
3. High Yield Investment Programs
If you are enticed by what appears to be an abnormally high return on a high-yield investment with little or no risk to the investor, it is most likely a fraudulent offering. These fraudulent offerings are perpetrated by individuals who are not licensed or registered. To find out if an individual offering a high yield investment is registered go to Investor.gov.8
4. Impersonation Schemes
Impersonation schemes involve fraudsters claiming to be someone they are not to entice or demand that individuals invest or provide them with personal information. This includes fraudsters that claim they work for a government agency like the SEC.
They may also represent themselves as legitimate investment professionals like brokers and investment advisers. You should verify the person’s identity before providing any personal information if they represent a government entity. The SEC personnel locator can be reached by calling (202) 551-6000 or you can call the SEC at (800) SEC-0330 to check if a communication is from the SEC. To verify that you are communicating with a legitimate investment professional do the following:
• In the “Check Out Your INVESTMENT PROFESSIONAL” search box on Investor.gov, select “Firm” from the drop down options and type in the name of the firm.
• In the search results, click on the relevant firm and then click on “Get Details.”
• Click on “Relationship Summary” or “Part 3 Relationship Summary to get a legitimate phone number or website and make sure it matches what your investment professional provided to you.
The additional investment fraud types will be overviewed in a future blog post. These fraud types include Internet and Social Media Fraud; Investment Scams Targeting Groups; Micocap Fraud; Ponzi Scheme; Pre-IPO Investment Scams; Pyramid Schemes; “Prime Bank” Investments; Promissory Notes; Pump and Dump Schemes; and Relationship Investment Scams.
Stay Protected with Experienced Securities Litigation Counsel
If you suspect investment fraud, broker misconduct, unsuitable recommendations, or account mismanagement, we can help you understand your options. Contact our securities law firm in Royal Oak to discuss your situation.
Our securities attorneys have decades of experience representing investors in recovery matters. Call today for a confidential, no-obligation case evaluation.
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1, 2 Crypto and Investment Scam Statistics for 2025 by Jack Caporal, 8/18/2025
Link: https://www.fool.com/research/crypto-investment-scams/?msockid=2c114190ff07677c35b657cbfe8c66c9
3 U.S. Securities and Exchange Commission Investor.gov website
Link: https://www.investor.gov/
4, 6 Types of Fraud
Link: https://www.investor.gov/protect-your-investments/fraud/types-fraud
5 Updated Investor Alert: Be on the Lookout for Advance Fee Fraud, 9/22/2016
Link: https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/updated-2
7 NFA Basic Tool
Link: https://www.nfa.futures.org/basicnet/
8 U.S. Securities and Exchange Commission Investor.gov website
Link: https://www.investor.gov