FBI Warns of Fake Firms Promising to Recover Lost Cryptocurrencies

The Federal Bureau of Investigation (FBI) has alerted the public to “an emerging criminal tactic” targeting investors who have already fallen victim to cryptocurrency scams and seek to recover their lost funds. These fraudsters often claim to be authorized by the FBI, Consumer Financial Protection Bureau (CFPB), or other government agencies to lend credibility to their schemes.

‘Law Enforcement Does Not Charge Victims a Fee for Investigating Crimes’

The Federal Bureau of Investigation (FBI) issued an alert on Monday about “an emerging criminal tactic used to further defraud cryptocurrency scam victims.” According to the FBI, fraudsters are impersonating lawyers from fake law firms, reaching out to cryptocurrency scam victims through social media and messaging platforms. They offer services to investigate and recover lost funds, aiming to deceive victims into providing more money or personal information.

The alert details that these fraudsters claim that they are authorized by the FBI, Consumer Financial Protection Bureau (CFPB), or other government agencies to validate their contact. Some victims initiate contact with these fraudsters through fake websites designed to look legitimate, seeking assistance to recover their lost funds, the FBI detailed, noting:

Between February 2023 and February 2024, cryptocurrency scam victims who were further exploited by fictitious law firms reported losses totaling over $9.9 million, according to the FBI Internet Crime Complaint Center (IC3).

To further their recovery scams, fake lawyers may request victims verify their identities by providing personal or banking information, or ask for the judgment amount they seek from the initial fraudster. They often demand upfront payment of fees with the balance due upon fund recovery, and instruct victims to pay for back taxes and other fees to retrieve their funds. To build credibility, these fraudsters reference actual financial institutions and money exchanges, making their schemes appear legitimate.

The FBI’s alert provides several tips for investors to safeguard themselves from this type of cryptocurrency scam. First, the bureau advises investors to be cautious of advertisements for cryptocurrency recovery services. It recommends thoroughly researching the company, being wary of those using vague language, having a minimal online presence, or making unrealistic promises about recovering lost funds.

“Law enforcement does not charge victims a fee for investigating crimes,” the FBI stressed, adding:

If an unknown individual contacts you and claims to be able to recover stolen cryptocurrency, do not release any financial or personal identifying information and do not send money … If someone claims an affiliation with the FBI, contact your local FBI field office to confirm.

Have you personally come across this type of crypto scam? Let us know in the comments section below.

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