Crypto Fraud and Asset Recovery: A Guide to Reporting and Recovering Lost Coins

Reporting crypto fraud is crucial, and it starts with knowing the right channels to report it to. The Federal Trade Commission (FTC) is a primary authority for reporting cryptocurrency scams, and you can file a complaint on their website.

If you've fallen victim to a phishing scam, act quickly to minimize losses. According to the article, phishing scams account for 55% of all reported cryptocurrency scams, so being cautious with emails and messages is essential.

In the US, the Securities and Exchange Commission (SEC) regulates securities, including digital assets. If you suspect a cryptocurrency investment is a security, report it to the SEC.

If you're dealing with a crypto recovery scam, watch out for fake emails and forged receipts showing "recovered" crypto. Be cautious of "success stories" from clients on Reddit and social media, as these are often fabricated.

Crypto recovery services that ask for an upfront fee are a major red flag. In almost all cases, the scammers will ask for additional fees as time goes by, citing excuses for not returning the crypto.

Here are some warning signs to look out for:

A legitimate crypto recovery service will never ask for an upfront fee before providing any help. This is a clear sign that they're trying to scam you.

They should also not claim to have special access to crypto exchanges. This is a common lie told by scammers to gain your trust.

A legitimate service will never ask for your passphrase or sensitive information, as this would compromise your security and identity.

They should also not ask for your bank account or crypto wallet password and details. This is a major red flag, as they're trying to steal more funds from you.

A legitimate company will always list a physical address, preferably in the United States. If they don't, or if it looks suspicious, it's likely a scam.

They should also be available to discuss their services over the phone, and their email address should look professional. This shows that they're a legitimate business, not a scammer hiding behind a messaging platform.

If you're looking to avoid falling victim to crypto recovery scams, it's essential to watch out for these warning signs.

Scammers often ask for an upfront fee before providing any help, which is a hallmark of an advance payment scam. This is a clear red flag that you're dealing with a fraudster.

They may also claim to have "special access" to crypto exchanges, but this is just a lie designed to make you trust them. A crypto exchange is a digital marketplace where you can trade cryptocurrencies, and no legitimate service can guarantee access to it.

Be wary of scammers who ask for your passphrase or other sensitive information. If someone asks for this kind of information, it means they're trying to steal your identity or gain access to your accounts.

Scammers may also ask for your bank account or crypto wallet password and details in order to deposit your "recovered" crypto. This is another attempt to steal more funds from you.

You should also be skeptical of companies that don't list a physical address or are located outside of the United States. Scam companies often don't list a business address, and if they do, it's usually outside of the US or isn't a real place of business.

Legitimate businesses will often communicate via phone and have a professional email address. Scammers, on the other hand, may only communicate via messaging platforms like Telegram or WhatsApp.

Here are some common warning signs to watch out for:

Be cautious of "crypto recovery specialists" who promise to recover your lost funds, but end up scamming you again. These scammers prey on victims by promising to recover their lost assets, but steal even more from them instead.

Scammers have started writing fake press releases that boast of their fake successes, which get published unchecked by many news outlets. They also create fake testimonials and success stories on their websites or social media to convince people that their service is legitimate.

If a "crypto recovery service" asks for an upfront fee or personal information, it's likely a scam. Advance payment scammers often demand odd things like upfront fees, "donations", and requests for payment or personal information.

Some red flags to watch out for include:

Remember, if it seems too good to be true, it probably is. Always do your research and be cautious of anyone who promises to recover your lost crypto assets for a fee.

Hackers leak stolen data onto the Dark Web, which can be used to steal your identity and money. Check if your accounts have been compromised by using Aura's free Dark Web scanner.

You should secure your accounts by using unique, strong passwords and pay attention to data breaches. Use two-factor (2FA) or multi-factor authentication (MFA) on all of your accounts, and whenever possible, use an authenticator app instead of SMS for your 2FA codes.

Never send another individual your personal or payment information over the internet. Ignore all requests, promises, and threats that you receive via text messages and emails, and always contact companies or government agencies directly via their official contact information.

Here are some key steps to protect yourself:

Proactive digital security can also help. Consider signing up for Aura, which offers identity theft protection, credit monitoring, and 24/7 fraud resolution specialists.

You can report a crypto scam to your exchange, providing them with details about the scam, such as how and when it happened, and any transaction identification (TXID) codes.

The exchange may be able to freeze the perpetrator's account and potentially return the stolen crypto.

To report a scam to authorities, include detailed transaction IDs, wallet addresses, and timestamps, among other related information.

Reporting scams to government agencies, such as the Federal Trade Commission (FTC), Commodity Futures Trading Commission (CFTC), U.S. Securities and Exchange Commission (SEC), and the FBI's Internet Crime Complaint Center (IC3), can help catch scammers and prevent future fraud.

You can also report scams to your local law enforcement agencies, who may be able to obtain arrest and asset seizure warrants.

In some cases, cryptocurrency exchanges can assist in the recovery process by sharing transaction information and freezing suspicious accounts.

However, recovering stolen cryptocurrency is challenging, and only in specific cases, such as hardware damage or partial key loss, is it potentially recoverable.

Here are some ways to report a crypto scam:

Additionally, cryptocurrency exchanges can assist in the recovery process by:

However, the effectiveness of these tools can be limited by the sophistication of malicious actors, and a multidisciplinary and pragmatic approach is essential in tackling blockchain-related fraud.

Asset recovery in the context of crypto fraud is a complex and challenging process. Cryptocurrency asset recovery presents a unique set of challenges due to the decentralised nature of these assets.

The inherent anonymity of digital wallets, maintained by private keys, makes it difficult to identify the owners or the locations of these assets. This anonymity complicates the process of asset recovery.

Tracing and recovering assets in cases of blockchain-related fraud is a technically challenging process. The core issue stems from the high level of anonymity and the transparency of transactions on the blockchain.

The use of chain analysis and other advanced digital tools has become integral in tracking crypto assets. These tools can examine the blockchain, identify patterns, and potentially link digital wallets to real-world identities.

However, the effectiveness of these tools can be limited by the sophistication of malicious actors who often use techniques like "coin mixing" or "chain hopping" to obscure the trail of transactions.

A multidisciplinary and pragmatic approach is essential in tackling blockchain-related fraud. This approach combines technical knowledge with legal and investigative skills to take on the anonymised web of digital transactions.

Here are some of the challenges in crypto asset recovery:

The recovery of stolen or misplaced cryptocurrency assets requires swift, deliberate actions, combining technical expertise and legal acumen.

Scammers often create fake success stories on Reddit and social media to promote their crypto recovery services. They use sob stories to target distraught people who are desperate to recover their lost investments.

These fake success stories are often created using hacked accounts or new accounts with very few posts, and they follow a similar template with little detail about charges incurred or methods used to recover the crypto. They use emotional language to manipulate people into trusting their services.

If you're looking for a legitimate crypto recovery service, be wary of those who refer to "experts" on Instagram, WhatsApp, or Telegram. Real professionals are more likely to use a combination of emails and direct calls to conduct business.

Here are some red flags to watch out for:

Our investigations are a multi-step process that involves careful analysis, thorough research, and expert techniques. We start by analyzing your conversations to look for possible slip-ups or clues that could help us identify the bad actors.

We use a combination of online searches and database queries to collect evidence and track the money trail. This can involve following the money to the final beneficiary, even if the scammer has tried to launder the funds.

Our team of experts, including open-source specialist investigators, computer forensic experts, and cyber security specialists, work together to identify, locate, and arrest the perpetrators. We cooperate with law enforcement globally to set up stings, arrests, and asset seizures.

We specialize in blockchain forensics and tracking Bitcoin transactions, Ethereum, Ripple, Litecoin, Ether, and other cryptocurrencies. Our expertise lies in on-chain and off-chain analytics analysis, as well as investigative techniques.

Here are some of the ways we investigate cryptocurrency scams:

Our success rate is high, with a personal touch. We don't take on more cases than we can handle, ensuring that each case is thoroughly investigated. Our retired FBI Supervisory Special Agent, John Wetherington, personally liaises with law enforcement agencies to find the best venue for a successful investigation.

Rexxfield is a leader in conducting cryptocurrency investigations, and we're proud to be Chainalysis' ONLY specialty investigation partner. This means we have access to the leading investigative software tool, Chainalysis Reactor, which helps us analyze and trace cryptocurrency transactions across blockchains.

Chainalysis Reactor is used by top law enforcement agencies, including the FBI, DJS, and US Secret Service, to identify illicit activities and establish connections between digital wallets and real-world entities. We send these agencies the Reactor ".grf" files directly, for quick reconstruction and verification of our work.

We've seen firsthand how Chainalysis Reactor can help crack even the toughest cases. With this powerful tool, we can identify the perpetrators and recover stolen funds, giving our clients a sense of justice and closure.

Here are some benefits of working with Rexxfield as Chainalysis' ONLY specialty investigation partner:

Client Success Stories are often fabricated by crypto recovery scammers to lure in potential victims. They create fake Reddit accounts or use hacked accounts to post invented "success stories" that promote their own services.

These fake success stories usually involve sob stories about losing life savings, but being saved by the scammer's recovery service. The accounts posting these stories are often brand new, have very few posts, or show signs of being stolen from a previous user.

Scammers also refer to "experts" on social media platforms like Instagram, WhatsApp, and Telegram. However, real professionals are more likely to use a combination of emails and direct calls to conduct business.

The "success stories" posted by scammers follow a similar template, with very few details about charges incurred or methods used to recover the crypto. They use emotional language to target distraught people who are desperate to recover their lost investments.

Here are some red flags to watch out for in fake "success stories":