An analysis of multi-level marketing (MLM) cryptocurrency schemes reveals a continued decline throughout 2024, a trend first observed in the fourth quarter of 2023. This shift signals changing dynamics in digital financial fraud, with older "AI trading bot" narratives losing credibility among potential victims. No major new crypto investment fads gained significant traction during the year.
The primary exception to this downturn involved Chinese-operated "click a button" app Ponzis. These schemes typically involve users depositing funds and performing simple, repetitive tasks within an application, such as clicking to "mine" digital currency or "process" orders, under the promise of daily returns. While numerous such low-effort apps appeared and disappeared weekly, few achieved the widespread scale of earlier crypto frauds.
Increased regulatory scrutiny across Asia contributed to the disruption of these Chinese-run scam operations. Authorities in various jurisdictions intensified efforts against these fraud factories, bringing their methods into wider public discourse. Despite these actions, criminal networks persist, adapting their strategies to maintain profitability through these rapidly launched, short-lived applications.
The overall reduction in large-scale MLM crypto frauds in the past year might stem from a combination of factors. Heightened consumer awareness regarding the inherent risks of cryptocurrency-based schemes likely deterred some potential investors. Simultaneously, a general tightening of economic conditions could have limited the available capital for speculative or fraudulent investments.
A significant shift in the regulatory landscape for financial fraud, particularly affecting crypto-related enforcement, began on January 18, 2025. This date marks a concerning intertwining of political directives with the investigation and prosecution of financial crimes. Regulators, as governmental entities, face inherent conflicts of interest when enforcement priorities are influenced by political administrations.
The U.S. Department of Justice (DOJ) disbanded its National Cryptocurrency Enforcement Team (NCET) on direct order from President Trump. Established in February 2022, the NCET comprised attorneys specializing in cryptocurrency, cybercrime, money laundering, and asset forfeiture, aiming to address the criminal misuse of digital assets. The team's active period coincided with a general decrease in U.S.-based MLM crypto fraud.
This disbandment removes a dedicated federal resource designed to combat complex digital asset crimes. Concurrently, the Securities and Exchange Commission (SEC) has withdrawn several high-profile crypto fraud-related cases, including those against Ripple Labs, Kraken, and Coinbase. These actions signal a potential reevaluation of enforcement strategies at the federal level.
The long-term effects of these policy shifts on the enforcement of financial fraud remain under close observation, especially for schemes involving wire fraud, securities fraud, and money laundering.