Investment Scams in the United States
The United States sees more reported investment fraud losses than almost any other country, with billions lost annually to crypto investment scams, pig-butchering, and unregistered securities offerings. The SEC and FTC actively pursue perpetrators but prevention requires consumer vigilance.
Part of: Investment Scams
Last reviewed: 1 June 2026
America's large investor class, high wealth per capita, and sophisticated financial market culture create both a large pool of investment-active consumers and a set of cultural references scammers exploit — FinTech disruption, Silicon Valley billionaires, crypto innovation. The FTC's Consumer Sentinel Network records tens of billions of dollars in investment fraud losses each year.
The SEC's Office of Investor Education and the FBI's IC3 regularly identify emerging fraud patterns. Despite this infrastructure, fraud adapts quickly: pig-butchering schemes, AI-generated investment advisors, and cloned brokerage websites represent the current frontier.
How this scam works on United States
US victims most frequently encounter investment fraud via social media advertising, where paid placements for fraudulent crypto platforms and managed investment funds run alongside legitimate advertising. Deepfake videos of tech and financial celebrities endorse platforms that collect deposits and block withdrawals.
Pig-butchering contact often begins on dating apps, LinkedIn, or WhatsApp, with the romantic or professional relationship serving as a trust-building mechanism before investment is introduced. US victims have reported losing six and seven-figure sums to these schemes.
Unregistered securities offerings exploit investor enthusiasm for startups: victims are sold shares in companies that either do not exist or have grossly inflated valuations, with no SEC registration or exemption.
Common red flags
- Investment opportunity promoted via unsolicited social media ad featuring a recognisable celebrity
- Platform not registered with the SEC or FINRA
- Guaranteed returns stated with no risk disclosure
- Investment contact met on a dating app or social media begins steering conversations toward financial opportunity
- Withdrawal requires payment of a fee described as tax, compliance, or account verification
- Unregistered securities offering made via private message or cold email
How to protect yourself
- Verify any investment firm on the SEC's Investment Adviser Public Disclosure at adviserinfo.sec.gov
- Check brokers and firms on FINRA BrokerCheck at brokercheck.finra.org
- Never invest based on a social media ad or unsolicited contact without independent verification
- File a tip with the SEC at sec.gov/tcr if you suspect an unregistered securities offering
- Consult a registered investment adviser found through NAPFA or the CFP Board
- Ignore any investment promoted with guaranteed returns — these are prohibited claims for legitimate registered offerings
How to report it
- Report to the SEC at sec.gov/tcr for unregistered securities or investment adviser fraud
- File a complaint with the FTC at ReportFraud.ftc.gov
- Report to the FBI IC3 at ic3.gov for crypto investment fraud
Frequently asked questions
How do I check if an investment platform is registered with the SEC?
Use the SEC's EDGAR database and FINRA's BrokerCheck tool to verify registration of both the firm and any individual offering you investment advice. An unregistered entity offering securities or managed crypto trading in the US should be treated as very high risk.
Where do I report an investment scam in the United States?
Report it to the SEC via its online complaint form and to the FTC at reportfraud.ftc.gov; if crypto was involved, also file with the FBI's IC3. Filing with multiple agencies helps since each tracks different aspects of fraud enforcement.
Can I get a tax deduction or any relief for money lost to an investment scam?
Certain theft-loss deductions may be available under IRS rules in specific fraud circumstances, but eligibility is complex and depends on your specific situation — consult a qualified tax professional rather than assuming automatic relief. This is separate from any direct recovery of the lost funds.
How do I check if an investment firm is registered with the SEC?
Use the SEC's Investment Adviser Public Disclosure tool at adviserinfo.sec.gov to search registered investment advisers. Broker-dealers are searchable through FINRA BrokerCheck at brokercheck.finra.org. If a firm appears on neither, it is operating outside the regulatory framework.