The digital asset economy is facing an unprecedented crisis of trust. In the first half of 2025 alone, malicious actors siphoned more than $2.17 billion from the ecosystem, making 2025 the most devastating year for financial theft on record.
Most of this money was lost through hacking, exchange compromises, and wallet theft. However, experts believe that the current market share expansion is due to Virtual currency presale scamRagpull, fake token launch to capitalize on new hype.
Telegram, Discord, and X are now filled with flashy promotions for “next generation tokens” and “100x returns,” often sponsored by celebrities. In reality, many of these projects do not offer transparency, auditing, or liquidity protection.
Driven by FOMO, many investors buy without checking whether the smart contract ownership, liquidity lock, or team is genuine. This leaves them vulnerable if liquidity suddenly disappears or the project disappears.
Security companies also say scam techniques are becoming more sophisticated. AI-generated whitepapers, fake audits, and step-by-step developer profiles make fraudulent projects look legitimate. It is becoming increasingly difficult for ordinary investors to distinguish between genuine pre-sales and well-designed scams.
In this article, we explore the rise in pre-sale cryptocurrency scams, how these scams work, red flags to look out for, and practical ways investors can protect themselves.
Pre-sale fraud techniques
Pre-sale cryptocurrency scams typically follow a well-known pattern built on hype and FOMO. Fraudsters create fake token contracts and claim liquidity is locked, or set up developer wallets that quietly drain funds after launch.
They use the excitement of early token sales to raise funds quickly and then disappear, leaving investors with worthless tokens. To appear legitimate, these projects often use sophisticated websites, whitepapers, and active social media accounts.
Investors can spot danger by monitoring for obvious red flags. That means an anonymous team with no KYC, LinkedIn presence, or verifiable track record. Promising huge profits such as “100x profit”. Projects driven by influencer promotion rather than actual code, roadmaps, or utilities. Missing audits, vesting schedules, or transparent contract details are also key warning signs.
Recognizing these patterns is essential as fraud is more sophisticated than ever in the 2025 market. The strongest defense against pre-sales fraud remains vigilance.
Regulatory notice
Financial watchdogs around the world are increasingly sounding the alarm over pre-sale cryptocurrency fraud. Agencies such as the US Securities and Exchange Commission (SEC), UK Financial Conduct Authority (FCA), European Securities and Markets Authority (ESMA), and Monetary Authority of Singapore (MAS) have warned investors to exercise extreme caution when participating in early-stage token sales.
Many presales occur in a legal gray area, as decentralized issuances often fall outside traditional regulatory frameworks and offer limited protection for buyers in the event of fraud.
Regulators are also focusing on key opinion leaders (KOLs) and influencers who promote pre-sales of unregistered tokens. Promotion without proper disclosure and licensing often results in enforcement actions, fines, and negative reputational damage.
Impact on investors
Retail investors are the main victims of pre-sales fraud, often lured by promises of quick profits and hype on social media. Many participate in token pre-sales without doing any real research, relying instead on influencers and viral marketing.
This usually leads to a sudden drop in liquidity, the demise of the project, and ultimately the token becoming worthless. Psychologically, these losses create a cycle of fear and frustration.
As a result, confidence in presales has declined across the crypto industry, increasing investor scrutiny and slowing funding for serious early-stage projects.
Security expert commentary
Security auditors warn that cryptocurrency scammers are becoming increasingly sophisticated and dangerous. CertiK’s January 2025 analysis found that nearly half of the Ethereum-based token issuances promoted by Telegram groups from late 2023 to mid-2024 were rag-pull schemes.
Specifically, out of 93,930 promoted tokens, approximately 46,526 (49.5%) were flagged as fraudulent, resulting in hundreds of thousands of ETH being leaked. CertiK said these point to “organized fraud groups” using fake liquidity, unverified developers and ghost audits to appear legitimate.
In a previous lag pull report, CertiK reviewed 40 “hard rug pull” cases from 2020 to 2023 and highlighted recurring risk factors such as anonymous developers, no audits, vague or nonsensical utilities, and heavy marketing in lieu of transparency.
PecShield’s 2024 report, released in January 2025, adds further concerns. Approximately $834.5 million has been stolen through fraud (on top of the $2.15 billion lost to hacking), and fraud-related losses continue to increase each year.
In addition to technical abuses, many losses have been caused by deceptive token launches and questionable contracts, making pre-sales one of the riskiest areas in cryptocurrencies.
Taken together, these findings demonstrate that pre-sales fraud is a mix of social engineering tricks, AI-powered impersonation, and on-chain fraud, making it difficult to detect. So the old red flag checklist is no longer sufficient.
Related: PeckShield warns Web3 community about smart contract vulnerabilities
Market reaction and reputational damage
The rise in pre-sale fraud has made both retail and institutional investors more skeptical, posing significant challenges to legitimate early-stage token projects. Even strong projects are now facing tougher challenges when it comes to tokenomics, team trust, and overall transparency.
Hype tactics that once worked, such as influencer promotions and flashy social media campaigns, are now viewed with suspicion. This makes it difficult for real projects to build community trust.
Venture capital firms and institutional investors are also tightening their standards and asking deeper questions before offering funding. As a result, legitimate teams have to work harder to prove their credibility and earn investors’ trust.
Prevention and due diligence
Investors can take concrete steps to protect themselves from pre-sale fraud in the high-risk crypto market of 2025. First, we constantly validate our smart contracts and independent audits to ensure our code works as promised.
Ensure liquidity is locked and review vesting schedules to avoid scenarios where developers may run out of funds shortly after launch. Avoid projects that are solely about influencer hype. Because these projects often prioritize marketing over technical legitimacy.
Other important practices include validating your team’s identity and activity through LinkedIn, GitHub commits, or other trackable contributions. We review domain registration ages and ensure whitepapers are original and consistent, not AI-generated or plagiarized.
Cross-check all claims across multiple sources and track token flows using the on-chain explorer. By combining these due diligence steps, investors can significantly reduce the risk of exposure to fraudulent pre-sales while supporting reliable early-stage projects.
conclusion
As pre-sale fraud continues to grow in sophistication, investor vigilance has never been more important. While early-stage token launches offer the potential for high rewards, they also come with significant risks, especially in an environment rife with AI-powered fraud, anonymous teams, and hype-driven promotions.
Education, transparency, and careful due diligence remain the most effective defenses. Investors are urged to review contracts, audit reports, liquidity locks, team credentials, and remain skeptical of influencer-only promotions and unrealistic returns.
By staying informed and aware of red flags, the cryptocurrency community can navigate pre-sales more safely, support legitimate projects, and help foster a more trustworthy early-stage token ecosystem.
Related: Interpol declares global emergency against transnational cryptocurrency fraud network
Disclaimer: The information contained in this article is for informational and educational purposes only. This article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the use of the content, products, or services mentioned. We encourage our readers to do their due diligence before taking any action related to our company.
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