Top 5 Ways To Recover Funds From Crypto Currency Scam

Top 5 Ways To Recover Funds From Crypto Currency Scam

Cryptocurrency has become a popular digital asset used for several transactions in today’s digital world. But with its increasing popularity, incidents of the crypto scam are on the rise as well. To avoid fees and maintain anonymity, an increasing number of people are using cryptocurrency to purchase products and services and conduct payment transactions. Not only that, but investors also hold different digital currencies as investments to gain more profit.  

For these reasons, cryptocurrency has also caught the attention of many scammers in the digital world. Crypto scammers took a record $14 billion in 2021.

Primarily, a crypto scam refers to an illegal scheme that involves stealing your digital assets through phishing, blackmail, Ponzi schemes, and fake exchanges, among others. 

If you’ve been scammed, you’d feel devastated because of what happened, and you’d ask yourself whether the stolen funds could be recovered. Although there’s no 100% guarantee of recovery, there are ways to increase your chances of getting back your money.  

In this article, we will take an in-depth look at the types of cryptocurrency scams and the best ways to recover funds from a crypto scam.

Understanding the Scam

A. Types of Cryptocurrency Scams

Ponzi Scheme: This classic crypto scam is making a comeback in the world of cryptocurrency. It starts with a convincing pitch: an opportunity to earn big profits in a short amount of time. However, behind the invitation to earn big lies a sinister plot. The returns promised to early investors are paid using the funds of new investors, and the whole scheme eventually collapses when the flow of new investors dries up.

Phishing Scam: This cryptocurrency scam is all about tricking individuals into giving up their valuable information, such as passwords and bank details, by pretending to be a trustworthy entity. In the world of cryptocurrency, phishing scams can target exchanges, wallets, or even individual users. Crypto scammers are getting more advanced everyday. So always be on the lookout for anything that seems too good to be true.

Cloud Mining Scam: This crypto scam lures unsuspecting investors with promises of huge profits by investing in cloud mining operations. The idea is simple: rent mining power from a company to mine cryptocurrencies and watch the profits roll in. However, many of these companies are nothing more than fraudulent operations. They just wait to make a quick getaway with their clients’ hard-earned investments.

Also Read: A Detailed Overview Of Cryptocurrency, Trading & The Opportunities Around It

B. How Scammers Operate

Crypto scammers often trick people into giving them their cryptocurrency by posing as legitimate entities and offering too-good-to-be-true investment opportunities. For example, they may create fake websites or social media profiles that mimic well-known exchanges or companies and offer fake promotions or bonuses to get people to deposit their crypto into their accounts.

It is important to be cautious when dealing with cryptocurrency and always do your research before investing. Don’t trust anyone who promises guaranteed returns, and always use reputable exchanges and wallets.

Reporting the Cryptocurrency Scam

A. Importance of Timely Reporting

Reporting a crypto scam in a timely manner is crucial for several reasons. It can help protect other potential victims from falling for the same scam. By alerting authorities and spreading the word, you can help prevent others from being taken advantage of by the same scammers.

Reporting a cryptocurrency scam can also help you recoup your losses. The sooner you report it, the better the chances of authorities being able to track down the scammers and recover any stolen funds. In some cases, reporting a scam can also lead to compensation or reimbursement for victims.

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B. Where to Report the Crypto Scam

If you use a specific exchange to fund your crypto account and send funds to a scammer, it’s best to report the scam to them. Tell them that the recipient of your money is a scammer so that the exchange platform can provide added security to your account.

Although this step doesn’t guarantee recovery, it can help increase your chances of getting your funds back by encouraging them to look for patterns that will help trace the scammers. Moreover, notifying the exchange will also make it more challenging for cybercriminals to scam other users in the future.

C. Information to Include in the Report

Losing track of vital information about the crypto scam can significantly affect your ability to recover your money from the scammer. Because of this, it’s crucial to document the situation accurately and properly. Whether it’s text messages, emails, or other correspondence, make sure to keep track of these sources of information for fund recovery purposes.  

To ensure proper documentation of the cryptocurrency scam, you should collect the following information: 

  • All transactions I.D. codes involved; 
  • Any information regarding the scam, including the scammers involved, how the scam started, the amount of money lost, exchanges involved, and when the scam happened; 
  • Other relevant information necessary for the investigation.  

Moreover, you should also secure access to the accounts where the funds originate. This is especially true when the investigators will require you to prove the ownership of the crypto account to expedite the investigation. However, if you want to understand better how cryptocurrency scams work and identify them, you can learn here or check some reliable resource websites for more information. 

Also Read: Risks In Exchanging Cryptocurrency And How To Avoid Them?

Legal Action

A. Option to Sue the Scammers

Although it doesn’t assure fund recovery, it’s also best to report the cryptocurrency scam to your area’s designated law enforcement authorities. 

Typically, when you report a crypto scam, the government will track down the criminals and get your funds back for you. Hence, don’t hesitate to work with your government.  

For example, suppose you’re a U.S. citizen. In that case, you can report any fraudulent activity involving crypto to the U.S. Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Federal Trade Commission. 

If you’re living outside the U.S., try to check where you can report a crypto scam and sue the crypto scammer to recover your money.  

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B. Hiring a Lawyer Specializing in Cryptocurrency Scams

A lawyer who specializes in cryptocurrency scams can help you recover your lost funds, file a complaint with the relevant authorities, and even pursue legal action against the perpetrators. In 2021, a US-based cryptocurrency investment platform, BitConnect, was shut down by the U.S. Securities and Exchange Commission (SEC) for operating a Ponzi scheme. Investors who lost funds in the scam could have hired a lawyer specializing in cryptocurrency scams to help them recover their losses and hold the company accountable for their fraudulent activities.

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Alternative Solutions

A. Working with a Recovery Firm

A crypto recovery firm can help retrieve lost or stolen crypto funds. They use their technical expertise and resources to track down and recover lost crypto assets. This includes utilizing their proprietary tools and connections in the industry, as well as their understanding of the crypto landscape and potential vulnerabilities. If you have lost access to your crypto assets, a crypto recovery firm can help you retrieve them and restore your financial security.

B. Participating in a Class Action Lawsuit

If you are a victim of a crypto scam, joining a class action lawsuit can help you in recovering some or all of your funds. A class action lawsuit pools together many victims who have suffered similar crypto losses. This makes it easier to hold the perpetrators accountable and seek justice.

In a class action lawsuit, the plaintiffs (the people who have suffered losses) appoint a representative who leads the legal battle on their behalf. This representative is usually an experienced attorney who has a thorough understanding of the legal system as well as the crypto world and knows.

Wrapping Up 

Dealing with a cryptocurrency scam can be frustrating, especially if you have no idea how to get your funds back. As of Q1 2022, there are over 300 million crypto users in the world. Cryptocurrency scammers take advantage of the growing popularity of crypto and trick people into giving up their digital assets through phishing, Ponzi schemes, etc. However, if you have fallen victim to a crypto scam, there is still hope of recovering your funds. 

Reporting the crypto scam in a timely manner to the exchange platform or the law enforcement authorities can increase your chances of recovery. Additionally, it is crucial to document the situation accurately and properly. Legal action, such as suing the crypto scammers, can also be considered to track down the criminals and recover the stolen funds. Always be cautious when dealing with cryptocurrency, and always do your research before investing.


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Cryptocurrency is a digital or virtual currency that makes use of cryptography to guarantee confidential monetary exchanges. There is no deception involved, but there is some danger involved as with any investment. Some people have lost money investing in cryptocurrency due to its volatile value. However, many investors have reaped substantial rewards from their cryptocurrency holdings. Before putting your money into cryptocurrency, you should do your own due diligence and weigh the benefits and drawbacks. Additionally, it is recommended that you spread your investments out across various markets and never put in more money than you can afford to lose.

It may be difficult to recover stolen cryptocurrency. Follow these steps: Report the scam. If you’ve been scammed, report it so authorities can find the perpetrators and prevent others from falling victim. You can report the scam to the police, the FTC in the US, or the IC3 (IC3). Contact your cryptocurrency exchange or wallet. If the scam involved your cryptocurrency exchange or wallet, you may be able to recover your funds by contacting them. Hire a recovery service: Companies recover lost or stolen cryptocurrency. These companies may help you recover your funds for a fee. Record transactions: Keep track of dates, amounts, and addresses of all cryptocurrency transactions. This helps recover lost or stolen cryptocurrency. Future: Be careful when dealing with cryptocurrency exchanges and wallets. Protect your private keys and login information by using reputable services.


By using these tips, you can protect your cryptocurrency investment from scams. Before investing in cryptocurrency, do your research. Guaranteed returns or too-good-to-be-true claims are red flags. Beware unsolicited cryptocurrency investment offers. Scammers use email and social media to find victims. Use reputable exchanges and wallets to store and trade crypto. Read user reviews and recommendations. Safeguard private keys: Private keys let you access crypto. Keep them safe and secure. Scammers may target your name, address, and bank account information. Make sure you’re dealing with a legitimate and trustworthy person or company before sharing this information.


By reporting the scam, you can help authorities catch the criminals and protect others. If scammed, tell the police. They may help you recover funds or find criminals. FTC investigates consumer complaints, including cryptocurrency scams. Visit the FTC’s website or call 1-877-FTC-HELP to report a cryptocurrency scam. Complain to the IC3: The IC3 investigates internet-related crimes, including cryptocurrency scams. IC3 scams can be reported online or by calling 1-888-495-8501. If the scam involved your cryptocurrency exchange or wallet, report it to them. They may help you recover funds or prevent future scams.


In cryptocurrency scams, criminals attempt to deceive victims into sending cryptocurrency or personal information. Common cryptocurrency frauds consist of: In a phishing scam, criminals send emails or texts purporting to be from a legitimate company or person, requesting that the victim click on a link or enter login information. A fraudulent login page or link steals personal information. In a Ponzi scheme, criminals promise high returns on cryptocurrencies or other investments, but the returns are paid from the investments of new victims rather than from actual profits. Ultimately, the scheme fails and the perpetrators vanish. Fraudulent actors claim to have a \”guaranteed\” investment in cryptocurrency or other assets. The money of the victims is lost. Ransomware encrypts a victim’s files and demands digital currency in exchange for decryption. If the victim does not pay, the criminals may destroy the files or hold them as ransom. By being aware of these scams and vigilant with cryptocurrency, you can avoid falling victim to them.


Here are some red flags for crypto scams. Returns are assured On most legitimate investments, there is no \”guaranteed\” return. Guaranteed returns on cryptocurrency are likely a scam. Scammers frequently claim that the opportunity is limited or that the victim will miss out if they do not act immediately. Be wary of unsolicited investment opportunities in cryptocurrencies or other assets. Scammers use social media and email to find victims. Dishonesty: The operations and finances of a legitimate investment should be transparent. Speculative or secretive investment opportunities are likely to be fraudulent. Swindlers may ask for your name, address, and bank account details. Ensure that you are dealing with a legitimate and reputable person or organisation before disclosing this information. By recognising these red flags, you can avoid a cryptocurrency scam. Before investing, conduct your own research and evaluate the risks and potential returns if you suspect a scam.


Cryptocurrency scams work similarly to phishing. The most common ways include fake celebrity endorsements to lure the public to buy crypto. There can be different scams like when a person calls you to seek your crypto key wallet passwords. The safest way out is to never share these crucial credentials with scammers or fake accounts.


Regular monitoring of your credit is necessary to avoid and recover from crypto scams. If you face such scamming, do proper documentation of the scam and notify your crypto exchange about the scam. Do not forget to include law enforcement agencies in the case.


There is no such way to revert a crypto transaction. However, if you wish to withdraw your money from crypto, navigate to the withdrawal section of your crypto exchange mobile application.


No, you cannot recover the money you lost in crypto. Crypto experts and several leaders advise understanding the crypto market and investments before investing.


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