Crypto’s ‘Trust’ Problem

Uploaded on 2025-07-22 in TECHNOLOGY--Resilience, TECHNOLOGY--Developments, FREE TO VIEW, BUSINESS-Services-Financial

There’s a lot of talk about the future of crypto - how it’ll reshape finance, decentralise control, and unlock new economic models. And that vision still holds. But right now, too many people are losing money. I am not referring to market volatility or bad trades, but rather the prevalence of fraud and scams.

In 2024 alone, Chainalysis estimates that a whopping $12.4bn was lost as a result.

We must fight back - not solely from code bugs or protocol failures, but also from fraud: pig butchering schemes, fake platforms, phishing links, wallet drainers, SIM swaps. These are crimes built on trust - manipulated, then monetised.

And they’re happening every day.

We often hear the word ‘hack’ thrown around when funds go missing. But most of what I see isn’t a traditional hack. It’s psychological manipulation. It’s social engineering.

Take pig butchering (a type of online scam where the victim is encouraged to make increasing financial contributions over a long period), which has grown by 40% in 2024. It’s a slow-burn scam where someone builds a fake online relationship, often over weeks - before introducing a “can’t-miss” crypto investment platform, for example. Everything looks real.

The site works, the charts move, withdrawals appear to process. But it’s a trap. And once the victim is deep enough in, the exit vanishes.

Losses can be life-changing. Some of our customers have lost 8-figure sums. And because crypto lacks the safety nets of traditional finance - no chargebacks, no fraud department - most people are told there’s nothing they can do.

We don’t think that’s good enough.

In crypto circles, people often talk about security in technical terms: audits, zero-days, bridges and smart contract bugs. That stuff matters. But the biggest threat I see every day, as the founder of a crypto insurance, investigation and recovery firm, is people being deceived, with human nature and vulnerabilities being exploited.

Yet, too many platforms still treat fraud as a user-side problem. There’s often no formal response process. No fund tracing plan. No recovery team. And when victims ask for help, the response is usually a shrug after a long wait for a response.

And timing matters. The first 24 - 48 hours after a scam are often make-or-break for any kind of recovery. That’s why we’re set up to move fast.

Crypto is no longer just an experiment. It’s becoming infrastructure - for payments, for identity, for asset ownership. But if we don’t fix the trust issue, adoption will stall. People won’t come near something they feel they don’t understand - or worse, don’t feel safe using.

The crypto industry can no longer treat trust as a user problem. Platforms, devs, and investors all have a stake in building systems that are resilient not just to bugs, but to bad actors. That means designing for prevention, detection, and response. It means funding recovery infrastructure, publishing clear protocols for fraud cases, and refusing to ignore victims. We need the same kind of seriousness applied to scams as is applied to smart contract audits. Until that happens, fraud will remain the single biggest threat to mass adoption.

The truth is, we need a shift in culture. Security can’t be an afterthought. It can’t be seen as a blocker to growth or a checkbox before launch. It has to be baked into the DNA of every team, every product, every roadmap.

Let me be clear: this is not a call for deceleration - far from it. But if we’re serious about achieving the mass adoption the industry aspires to, we must focus on strengthening the entire ecosystem. Because the promise of Web3 is not just exciting - it’s worth protecting.

And it starts with trust.

Neil Holloway is Founder of M2 Recovery

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