Cryptocurrency scam recovery: Is it possible and what should I be cautious of?

AceChange - Cryptocurrency scam recovery: Is it possible and what should I be cautious of?

This article is a guide on how to avoid scams associated with cryptocurrencies and how to act if you have already become a victim of scams. With the increasing number of scams in the field of cryptocurrencies, various companies have emerged offering to recover your cryptocurrencies from the scammers. We will address this topic in the first part of the article, and in the second part of the article, we will focus on typical scams from the field of cryptocurrencies.


Cryptocurrency scam recovery services


If you have become a victim of a cryptocurrency scam, you have likely sought help and most probably have come across companies that offer to recover your cryptocurrencies for a fee. Let's take a closer look at this. If you contact such a company and they immediately ask for a fee or deposit without having you thoroughly describe your case, it is a scam, and you should immediately stop communicating with that company.


In case the company you have chosen asks for a detailed description of the theft and requests from you 50% of the total sum or even the whole amount, this is also a scam because they cannot be sure of the outcome themselves. In reality, any company that guarantees results in dealing with cryptocurrency scams is also a scam scheme, and you may end up losing even more money. What should a legitimate company specializing in security and assistance in uncovering scammers look like? First of all, it should ask for no more than $500 for an analysis; this amount is sufficient to cover the costs for an analyst who will evaluate whether your case can be successfully concluded. If you find such a company and it does not ask for more than a 30% deposit for its services, we can proceed to the next steps. To give you an idea, a good analyst and white hat hacker in Central Europe charges at least 5,000 euros per month, and most cases take 2 to 6 months to investigate.


This is just for you to understand how expensive an attempt to recover your cryptocurrencies back to your account can be, and ideally, there should be at least two hackers in the team. It's necessary to realize a few facts: most recovery techniques are based on social engineering, which has its sequence: communication with official bodies (police), uncovering the identity of the perpetrator, and then determining how to request the cryptocurrencies back. Every case is different and depends on many things, such as where the perpetrator is located, their age, whether they have children, and many other variables. It's also important to emphasize that you must act according to the laws; if you make a mistake, it could cause the entire case to be dismissed in court due to a procedural error, for example, if evidence was obtained illegally. And now the most important thing: what are the chances of recovering money from such a scam? Unfortunately, I don't have good news for you; the success rate is around 3% to 5%, but the chance of uncovering the identity of the perpetrator is significantly higher. Below, you can read about the most typical types of scams with cryptocurrencies, and if you have any questions, feel free to write to us on our chat or email.





1. General scams


In this category, we classify projects that at first glance appear to be attractive investment opportunities. However, their primary intent on the part of the creators is to unethically enrich themselves at the expense of investors, with the obtained funds being used exclusively for personal gain.


Recognizing such fraudulent schemes can be difficult, especially in the complex world of alternative currencies (altcoins), decentralized finance (DeFi), non-fungible tokens (NFTs), and the Metaverse. For laypeople, it's a challenge to distinguish legitimate companies, which have ambitious but potentially unfeasible plans, from those that establish projects with the primary goal of getting rich quickly, especially in the early stages of financing, often through initial coin offerings (ICO), thanks to persuasive marketing and unrealistic promises.


Warning signs include any guarantees of future profits, expressed either in currency or percentages, as well as exaggerated marketing that is not supported by technological fundamentals. To avoid this type of scam, it's crucial to conduct thorough research on the project and always apply critical thinking and sound judgment.


First and foremost, you should not expect from any project (even those with good intentions) that it will certainly make you rich. You might have heard the following phrase many times, but sometimes it needs to be repeated:



Never invest more in cryptocurrencies than you can afford to lose, and what sounds too good to be true, most likely isn't true.



2. Phishing Attacks


Phishing attacks are among the most dangerous and sophisticated types of cyber fraud. These attacks, which are a form of hacking activity, can lead to the unwitting installation of malicious software on your devices, including computers and mobile phones.


In some cases, this software may only slow down your device as it mines cryptocurrencies in the background unnoticed. Worse, however, is the theft of sensitive data due to your carelessness, which can lead to significant financial loss.


A notable example of a phishing attack is the installation of software that pretends to be a legitimate application for cryptocurrency wallets. This fraudulent software may ask the user for what's known as a seed (a key to a private wallet), and if the user is not sufficiently informed and cautious, they may trustingly provide these critical details. This can lead to the loss of all the cryptocurrencies stored in the affected wallet.


To prevent such attacks, the use of antivirus software is recommended, but above all, constant vigilance, caution, and foresight are crucial. It's essential to always thoroughly consider the authenticity and security of any requests to share sensitive information. When it comes to requests for a seed, double caution is advised. Your safety on the internet should always be a top priority.



Image: This scam email posed as an official mail from the hardware wallet manufacturer Trezor by Satoshi Labs, with information urging the download of a new (fraudulent) version of their Trezor Suite software.




3. Give 1, I'll give you back 2


One of the typical, and for some perhaps amusing, but still effective types of scam, are tempting offers to quickly increase the number of coins in cryptocurrency.


This trick is based on the principle where the attacker - often using automated bots or software - offers less experienced investors in the field of cryptocurrencies the opportunity to multiply their crypto assets. This promise is usually presented under various pretexts, such as contests, celebrations, or marketing activities.


A typical example of a scam in this category might sound like this: "Send me 1 BTC to my address and I will send you two bitcoins to your address, from which you sent it to me."


The deceitfulness of this scam lies in the fact that the scammer often poses as a publicly known personality or company and justifies the transaction by needing to "verify" your address - the address from which you send BTC or another cryptocurrency.


If you are a user of social networks, such as Facebook, you may have also encountered such offers from fake profiles of well-known personalities from the local cryptocurrency scene.


A similar problem occurs on Twitter or YouTube, where fake accounts of Elon Musk or Bill Gates (and many others) also "distributed cryptocurrencies" in this way.


Of course, it is an obvious scam. If you send the specified cryptocurrency somewhere, certainly do not expect someone to send you back double the amount (or even more). Why would they do that? However, if you think that no one could fall for such a scam, unfortunately, you are mistaken. There are many cases.




Illustration of a scam on a Twitter account that exploited the name of Elon Musk.



4. Creating Deceptive Websites


In the digital world, where first impressions are key, some fraudsters invest significant effort into creating aesthetically appealing websites. These sites are designed to present your supposed earnings within an attractive and professional design. The illusion of growing profits on these pages is intended to motivate you to make further investments.


However, when the moment comes that you decide to sell your cryptocurrencies, you encounter an unexpected obstacle. You are informed that the sale can only be completed after paying a "special withdrawal fee." After paying this fee, however, you find that it is not enough and the system begins to show errors. Communication gradually ceases entirely, and you are left to come to terms with the realization that your supposed earnings were fiction from the beginning. In the end, you lose not only the illusion of profit but also all the funds you invested in this scam.



5. Fraudulent Phone Calls and Emails in Cryptocurrencies


With the growing interest in cryptocurrencies, the number of fraudulent phone calls and emails related to this sector is also increasing. This person may claim that you have cryptocurrencies stored on a certain platform of considerable value and that it is necessary to withdraw them as soon as possible, otherwise, you risk losing them.


During the conversation, they will try to provide you with instructions on how to access your supposed cryptocurrencies. However, these steps are often designed so that in the end, not only do you not receive any cryptocurrencies, but paradoxically, you end up contributing financially to the scammer.


It is important to realize that legitimate exchanges and crypto platforms do not contact their clients by phone to inform them about balances or the process of withdrawing assets. This practice simply is not logical or standard.


Similar schemes may also appear in emails or messages through social networks. Scammers often create the illusion of a favorable investment opportunity or present stories similar to those mentioned above. The key to protecting against these scams is to always be vigilant, critically assess each offer, and in case of doubts, seek independent advice.




6. Warning about "Rug Pulls" in the DeFi Environment


One of the hazardous trends that have spread in the era of decentralized finance (DeFi) are the so-called "rug pulls". This type of scam has a similar structure to other crypto scams, with the difference being that the scammers' goal is to attract investors to buy a new cryptocurrency (or token) that is exclusively available on decentralized exchanges (DEXes), and then mysteriously disappear with their investments. Investors are then left with a worthless token that they cannot sell.


An example of such a scam was the Squid Game token (SQUID), which emerged at a time when the world was captivated by the phenomenon of the Netflix series of the same name. Its creators exploited the huge interest in the series and quickly launched a worthless token with the same name in the third quarter of 2021. The token became an investment hit for a short time, but subsequently, its creators disappeared along with all the invested money. The estimated loss for the victims, who held worthless Squid Game tokens, amounted to millions of dollars.


The price chart of the SQUID token resembled a rollercoaster ride – initially, a huge increase in value by thousands of percent, which, however, suddenly ended with a fall to practically zero.


Rug Pull


The chart of the SQUID token looked something like this, by the way. First, a massive increase by thousands of percent, and then a collapse to practically zero.






Navigating the world of cryptocurrencies requires caution, as scams proliferate. If you're enticed by recovery services after falling victim to a scam, scrutinize their legitimacy and fees. Remember, genuine recovery efforts won't guarantee success but will offer transparent terms. Awareness and critical evaluation of investment opportunities can prevent most scams. Despite the challenges, educating yourself on common scams and acting legally and wisely can protect your digital assets. Ultimately, vigilance and informed decision-making are your best defenses in the dynamic yet risky cryptocurrency landscape.



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