Top 5 Ways to Recover Funds From Cryptocurrency Scams

Losing crypto funds to various scams and schemes is no small matter. It feels very much like losing money because that’s essentially what it is! Cryptocurrency is money, albeit in a digital, virtual form. If you’ve ever been unfortunate enough to lose hard-earned crypto tokens to a scam, you’re bound to learn a few helpful tips in this article to help you recover funds from cryptocurrency scams. Even if you’ve never been scammed before, the instructions below will come in handy if, for some reason, you fall victim in future.

Also read: What Is KYC and Why Does It Matter for Crypto?

1. Gather All Relevant Details

The blockchain records all transactions, including the illegal ones, as all actions carried out are permanent, transparent and cannot be erased. The transaction ID lets you see the wallet to which your funds were transferred, which can help subsequent investigation efforts by narrowing down the list of options. Therefore, make notes of the occurrence as soon as possible, including the transaction ID, potential names, phone numbers, online groups, web addresses, or social media IDs where you’ve integrated with the hackers. Also, note exactly how many tokens were lost and any other crucial details, whether major or minor, that could help with the subsequent investigation.

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2. Report to the Crypto Exchange and Relevant Authorities

Keeping quiet and trying to figure out everything by yourself is not ideal. If you’ve been scammed of your valuable crypto, the sooner you speak out, the better your chances of recovering the lost funds. As such, always reach out to the relevant platforms, starting with the cryptocurrency exchange that facilitated the transaction. You can also take extra steps by contacting the local authorities to help them understand how the scammers work and, if caught, how best to recuperate the stolen funds.

3. Seek Legal Advice

A cryptocurrency scam should be treated with the same seriousness as fiat money scams. As part of your steps to recover the lost funds after the fraud, you should reach out to a legal practitioner for advice on legal actions to take against the scammers. However, note that not just any lawyer will do. Rather, you should seek a lawyer with sufficient knowledge and experience with blockchain technology and cryptocurrency. As cryptocurrency’s asset class still remains widely debatable, many grey areas in legal interpretations may affect the course of an investigation. However, by getting a lawyer with proficiency in the field, you can get helpful advice on appropriate legal courses, which could further help the authorities and other professionals in the quest to recover the lost funds. Besides, legal considerations are indispensable because cryptocurrency scams usually involve several jurisdictions. 

4. Contact a Cryptocurrency Asset Recovery Specialist

Nowadays, there are cybersecurity experts in the blockchain niche who are specialist investigators and professionals in digital asset recovery. These cyber detectives or digital forensics take various steps to recover your assets and can help you collate evidence aimed at understanding the nature of the fraud, including any potential negligence on your part. They’ll also assess the damage, identify the scammers and initiate proceedings to help you recover the assets.

Also Read: 10 Best Free Copy Trading Platforms and Apps for 2023

5. Keep Calm and Take Precautions

When cryptocurrency scams occur, it is essential to stay calm, as clarity is needed to gather the relevant evidence and collaborate efficiently with the investigators. Thus, avoid the urge to panic and approach matters with a clear head. Finally, take the required precautions to secure any remaining cryptocurrency funds. For instance, you can move your funds off the exchange to a secure cold wallet.

Conclusion

Cryptocurrency scams can be devastating, especially considering just how much it took to accumulate the funds. However, even if you suffer fraud, there’s no need to panic. By following the tips above, you should be able to recover your funds successfully. Nevertheless, remember that prevention is better than cure. As such, take preventive measures to secure your funds while transacting and when they’re in storage. 

Frequently Asked Questions

What Should You Do First in the Event of a Crypto Scam?

In the event of a cryptocurrency scam, the first step to recovering your funds is to get all the required transaction details. Getting the transaction ID is essential as cryptocurrencies are, first and foremost, based on blockchain technology. 

Who Can Help You Recover Lost Crypto Funds?

Aside from the local authorities and legal advisers, cybersecurity experts known as digital asset recovery specialists exist to cater to issues involving cryptocurrency scams.

What Causes Crypto Scams?

Cryptocurrency scams can result from negligence due to wrongly placed trust. It can also result from greed, trading on fake cryptocurrency trading platforms, and generally collaborating with shady online dealers who often promise huge, often unbelievable rewards on equally deceptive investment schemes.