Three questions to tell a real crypto project from a scam
Ask what problem it solves, why a chain is needed, and where the value comes from. Then check two red flags.
This tool spots red flags. It is not investment advice, and we never recommend any coin. There is no AI behind it and nothing is sent anywhere.
Why these three questions work
A blockchain earns its place only when trust itself is the hard problem and there is no intermediary everyone can rely on. That is what the first three questions test: whether a real problem actually gets cheaper, faster or easier to verify, whether the chain is doing work a normal database could not, and where the value comes from. Add the two red lines nearly every scam crosses, promised returns and pressure to buy now, and most of the noise dies down on its own.
A rising price only means people are buying; it says nothing about whether the technology is useful. Something genuinely useful survives the three questions asked slowly. The harder someone pushes you to stop thinking and buy now, the sooner you should walk away.
Scam signals worth memorizing
Most crypto scams reuse the same small set of moves, so learning them once saves you from most of them. Guaranteed returns come first: a promise that you cannot lose, that payouts are fixed, or that the price only goes up. Real projects describe risk; scams describe certainty. Next is value that depends on recruitment. If the money mainly flows from new buyers or from people you bring in, rather than from anyone actually using the thing, the structure is closer to a chain letter than a business. Watch the team, too. An anonymous or unverifiable team, with no names you can check and no way to reach them, removes the one group who would be accountable if it fails. Urgency is another tell: a limited window, a closing allocation, a warning that hesitating means missing out. Pressure exists to stop you thinking. Then there is the vague problem, the pitch that never says whose specific cost or risk actually drops. Finally, be skeptical of "blockchain" invoked as a magic word, with no reason a shared, tamper-evident ledger is needed instead of an ordinary database. None of these alone proves fraud, but two or three together should end the conversation.
A worked example
Picture a typical pitch. A stranger in a group chat says a new "AI blockchain rewards platform" pays a fixed 3 percent every week, that early members are guaranteed to profit, that spots close on Friday, and that you earn extra for every friend you bring in. The team is a logo and a first name. Run it through the five checks. Question one: what real problem gets cheaper or more verifiable? The pitch never says, so it stays vague. Question two: why does it need a blockchain rather than a normal database? No reason is given; the word is decoration. Question three: where does the value come from? Weekly payouts funded by new deposits and referrals, not by any service, which is the recruitment pattern. Question four: does it claim you cannot lose? Yes, a guaranteed weekly return. Question five: is there urgency or secrecy? Yes, the Friday deadline. That is three serious red flags and two unresolved questions from a single message. The tool would return high caution, and correctly so. You did not need to know the coin's name to see the shape.
How to actually check a project yourself
Beyond this quick pass, a few concrete steps take you further before any money is involved. Start by reading exactly what problem it claims to solve, in plain words, and ask who specifically benefits and how. Then look for a real whitepaper that explains the mechanism and its trade-offs, not a slide deck of buzzwords and price predictions; if the document avoids saying how anything works, that silence is the answer. Check whether the code is public. Many serious projects publish their smart contract, and a genuine security audit by a reputable firm should be findable and readable, not just claimed in a banner. Then check whether the team is real and reachable: named people with a history you can verify, and a channel where hard questions get real answers rather than hype and deleted messages. Finally, work out where the token's value would come from if the hype vanished tomorrow, whether from fees, from actual usage, or only from the next buyer. None of this tells you what to buy, and none of it is a guarantee; it simply moves you from trusting a promoter to checking the evidence, which is the whole point.
Already sent money to a project like this? What to do now
Stop sending more first. The usual next demand is a "tax", "unlock fee" or "verification deposit" before you can withdraw, and paying it only adds to the loss.
Save the evidence before the other side deletes it: the website address, usernames, chat logs, and for every crypto transfer the address you sent to, the amount and type of coin, the transaction hash, and the date and time. Those are the details the FBI's Internet Crime Complaint Center asks for.
Then report it. In the US, file at ic3.gov and at ReportFraud.ftc.gov; IC3 also runs an elder fraud hotline, 833-372-8311, for people aged 60 and over. In England, Wales and Northern Ireland, report to Report Fraud at reportfraud.police.uk or 0300 123 2040, the service that replaced Action Fraud in December 2025; in Scotland, report to Police Scotland on 101. If the coins left through an exchange account, tell that exchange as well and give it the transaction hashes.
Be ready for the money not to come back. A crypto transfer cannot be reversed by your bank, and recovery depends on investigators tracing the funds to someone who can be made to return them.
Then watch for the second scam. People who report a loss get approached by fake recovery services, including invented law firms; the FBI said such firms took more than $9.9 million from crypto scam victims between February 2023 and February 2024. In a July 2026 warning, IC3 said it never contacts people directly by phone, email, social media or chat, never asks for payment to recover funds, and never refers anyone to a company that does. Anyone offering to get your money back for an upfront fee is running the same scam again.
How to check a token contract yourself
If the project's token lives on Ethereum or a similar chain, a block explorer such as Etherscan lets you check a few things without trusting the promoter. Copy the contract address from the project's own documents into the search box.
Open the Contract tab. If the source code is shown as verified, the published code matches what is actually deployed. Etherscan itself says verification does not mean the contract is safe, but a project that asks for your money and has not even verified its code is a reason to stop.
Open the Holders tab, which lists wallets by how much of the token they hold. If a handful of addresses hold most of the supply, they can sell into any price rise and leave everyone else holding the drop.
Then check the people. In the US, the CFTC's RED List names foreign firms acting as if they were registered with it when they are not, and investor.gov has a background check for investment professionals. In the UK, the FCA's Financial Services Register shows who is authorised, and its warning list names firms running scams or operating without authorisation. If the sellers claim a licence you cannot find, or appear on a warning list, stop there.
FAQ
Does this tool tell me what to buy?
No. It spots red flags in how a project is presented, and it never recommends any coin or token. Even a project that passes all five checks is not a buy signal; a coherent use case and a token worth owning are different things. Any decision involving money is yours to make, on your own research and within your means.
Is a working product a buy signal?
Not by itself. A real product means the technology may be useful, but useful technology and a token that will hold value are separate questions. Plenty of genuinely working projects have tokens that went nowhere. Treat a working product as one point in favor, then still ask where the token's value actually comes from before you conclude anything.
How do I check if a contract is audited?
Look for the audit itself, not a claim about it. A real audit is a published report from a named security firm, with a date and a scope you can read. Confirm it covers the contract actually in use, since a report for an old or different contract proves little. If a project only says "audited" on a banner with nothing to open, treat that as unverified.
Is anything I enter sent anywhere?
No. This tool runs entirely in your browser, there is no server behind it, and nothing you select is transmitted, stored, or logged by us. It does no lookups and holds no market data. It is a plain checklist that reflects your own answers back to you, so you can use it privately without sharing anything about the project you are checking.
I already sent money. Can I get it back?
Sometimes, rarely quickly. Stop paying any "fee" to withdraw, save the wallet addresses and transaction hashes, and report it: in the US at ic3.gov and ReportFraud.ftc.gov, in England, Wales and Northern Ireland at reportfraud.police.uk. Anyone who contacts you offering recovery for an upfront fee is a second scam; IC3 says it never asks for payment to recover funds.
Fang Yu is the editor of FutureLens, turning published papers, official materials and public explanations into plain-language notes. He is most interested in the gap between a technology’s public pitch and the evidence a careful reader can actually check. More about the author