How cloud mining and liquidity mining scams work
Scammers invite people to invest in crypto 'mining' farms, cloud mining contracts, or liquidity mining pools that promise steady daily returns. In liquidity mining scams, often involving USDT or ETH, victims connect a wallet to a fake app and approve permissions that let the scammer pull funds at will. Dashboards show fake earnings to encourage more deposits. When victims try to withdraw or complain, they are asked for more deposits or fees, and the funds are gone.
Warning signs of a mining scam
- Promised returns of a fixed percentage every day.
- Claims of 'no risk' passive income from mining.
- An app that requires you to connect your wallet and approve spending to join.
- Contact started through a stranger on social media or a messaging app.
- Required upgrades or larger deposits to unlock higher earnings.
- Fees or 'taxes' required before you can withdraw.
How to avoid mining scams
- Be skeptical of any guaranteed daily return.
- Do not connect your wallet to apps or sites sent by people you met online.
- Check and revoke token approvals regularly.
- Verify the company and its registration with regulators before investing.
- Never pay extra to withdraw earnings.
Invested in a mining scam? What to do now
- Stop depositing and revoke any wallet approvals; move remaining funds to a new wallet.
- Follow /guidance/crypto-stolen-first-72-hours if funds were drained through an approval.
- Preserve evidence before anything disappears: screenshots of chats, profiles, websites and app screens, plus receipts, emails, and a written timeline. Do not delete conversations or the app.
- Report it to the FBI at ic3.gov and to the FTC at reportfraud.ftc.gov, even if the amount is small. Include wallet addresses, transaction IDs (hashes), amounts, dates, and every website, app, username, and phone number involved. See /guidance/report-crypto-theft-fbi-ic3.
- Watch for recovery scams. Anyone who contacts you offering to get your crypto back for an upfront fee, or who claims to work with the FBI or IC3, is likely a scammer. IC3 says it will never ask for payment to recover lost funds or refer you to a company that does. See /guidance/can-stolen-crypto-be-traced.
Mining scams: common questions
Is cloud mining legit?
Be very careful. Offers of a fixed daily return, “no risk” passive income, or required upgrades to earn more are the signs of the scams in this guide. Check that the company is registered with regulators before investing anything.
What is a liquidity mining scam?
You are asked to connect your wallet to an app to “join” a liquidity pool, usually for USDT or ETH, and approve permissions. Those permissions let the scammer pull funds from your wallet whenever they want, while a dashboard shows fake earnings.
I approved a mining app. How do I stop it taking more?
Revoke the approvals and move any remaining funds to a new wallet. If funds were already drained, follow our first-72-hours checklist.
They say I must pay a fee or tax to withdraw my mining earnings. Should I?
No. Never pay extra to withdraw. It is the same trick as other fake platforms: why withdrawal fees are a scam.
Mining scam statistics
- The FBI reported liquidity mining scams had caused over $70 million in combined victim losses since January 2019 (as of July 2022). (source)
This guide is general information, not legal or financial advice. ChainWatch is not a law firm and does not guarantee fund recovery.
Sources
- ic3.gov/PSA/2022/PSA220721
- cftc.gov/LearnAndProtect/AdvisoriesAndArticles/watch_out_for_digital_fraud.html
- dfpi.ca.gov/consumers/crypto/crypto-scam-tracker/
The information on this page was checked against the sources listed in September 2026. Laws, agency guidance, company policies and contact details change, so please verify the current information with the original source before you act.