Crypto recovery services that offer to recover stolen cryptocurrency no longer in your wallet are scams. Getting that stolen crypto back is nearly impossible.
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The value of all existing cryptocurrency is $2.33 trillion, according to Bankrate. Cryptocurrency, such as Bitcoin, is a digital currency created using encryption algorithms, Oswego State University of New York says.
Using a cryptocurrency requires some kind of cryptocurrency “wallet,” which is where you store your encryption keys that confirm your identity and link to your cryptocurrency. The wallet is software that can be stored in a cloud, on your computer, or on your mobile device, Oswego State University of New York says.
If you lose access to your crypto wallet, you lose your entire cryptocurrency investment. There’s also the risk that your cryptocurrency can be stolen through hackers or scammers. Coindesk says people who use cryptocurrencies lost $2 billion to hacks and scams in 2023.
Nicholas emailed VERIFY to ask if there are any legitimate services that offer to help people recover stolen cryptocurrency.
Can crypto recovery services actually recover stolen cryptocurrency?
THE SOURCES
THE ANSWER
No, crypto recovery services cannot actually recover stolen cryptocurrency.
WHAT WE FOUND
Crypto recovery services that offer to recover lost or stolen cryptocurrency are scams. While there are a few legitimate companies that can help you with account or technology issues, those companies will not offer to recover stolen funds.
Sometimes, scammers will try to convince you they can get your money back by impersonating the government, a company or any other organizations. Others may be able to trace where the lost cryptocurrency went, but will have no way of actually recovering your lost assets as promised, the New Jersey Department of Justice says.
Typically, the scammer will reach out to you over social media, email, a messaging app or will bait you into contacting them through a seemingly legitimate advertisem*nt or website, the Commodity Futures Trading Commission (CFTC) says.
“At first, the scammer will appear to be knowledgeable, organized, and trustworthy while convincing you they can get all your money back,” the New Jersey Department of Justice says. “They will either ask for a fee for their services or ask for your financial information to put the lost funds back into your account. Either of these will result in further losses that are largely irreversible.”
The New Jersey Department of Justice recommends you do not pay anyone who contacts you with an offer to recover any money you’ve lost in a scam. The FBI says not to share any financial or personal identifying information and to not send any money if an unknown individual contacts you and claims to be able to recover your stolen cryptocurrency.
Legitimate crypto recovery companies offer password and data recovery services or help regaining access to your crypto wallet, Aura and Bitdefender, both cybersecurity companies, say. This may include recovering the wallet’s data from a broken or damaged storage device, decrypting encrypted wallets or recovering lost passwords. These companies will only charge you after they’ve successfully recovered your wallet.
“It's important to note that legitimate recovery services will never promise to recover your lost or stolen Bitcoin because it's nearly impossible,” Bitdefender says. “Scammers, on the other hand, may make such promises and ask for an upfront fee because they know they cannot deliver.”
The only time you might be contacted about legitimate restitution is if you're part of a government investigation or legal proceeding. In these situations, you would receive a letter in the mail. The CFTC has tips for verifying this type of mailing here.
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FAQs
Crypto recovery services that offer to recover stolen cryptocurrency no longer in your wallet are scams. Getting that stolen crypto back is nearly impossible. The value of all existing cryptocurrency is $2.33 trillion, according to Bankrate.
Can you get your money back if you get scammed on crypto? ›
Did you pay with cryptocurrency? Cryptocurrency payments typically are not reversible. Once you pay with cryptocurrency, you can only get your money back if the person you paid sends it back. But contact the company you used to send the money and tell them it was a fraudulent transaction.
What to do if you've been scammed in crypto? ›
If you think you've been a victim of a cryptocurrency scam, you should:
- Contact your bank immediately to see if they can prevent any payments from going through.
- Once you've spoken to the bank, make sure to report the incident to Action Fraud and National Cyber Security Centre.
How to restore your wallet from manually inputting a recovery phrase. As long as you have written down the words of your recovery phrase (typically between 12 and 24 words), you will always be able to restore your old/lost wallets by using that phrase. Steps will differ slightly from wallet to wallet.
Can you claim stolen crypto? ›
Investors can claim losses on various scenarios like trading activity, lost or stolen crypto, frozen funds, rug pulls, and worthless NFTs. Maintaining accurate records is crucial for claiming tax relief on crypto losses, and there are specific reporting requirements and deadlines for HMRC compliance.
Can I claim money lost in crypto? ›
Yes, you can write off crypto losses on taxes even if you have no gains. If your total capital losses exceed your total capital gains, US taxpayers can deduct the difference as a loss on your tax return, up to $3,000 per year ($1,500 if married filing separately).
Are there any legitimate crypto recovery services? ›
Legitimate crypto recovery services specialize in assisting individuals to regain access to their digital assets through technical means, such as data recovery from damaged storage devices or forgotten password retrieval.
Do banks refund scammed money? ›
If you've transferred money to someone because of a scam
This type of scam is known as an 'authorised push payment'. Your bank or building society should reimburse you if it's registered with the Lending Standards Board under their Contingent Reimbursem*nt Model Code (CRM Code).
How to spot a crypto scammer? ›
Besides trolling for victims on social media or messaging apps, here are 10 other telltale signs an online trading platform is a fraud:
- It isn't registered to trade forex, futures, or options.
- Trades crypto, but not registered as a money service business.
- No physical address, it's clearly fake, or offshore.
Unfortunately, there is no straightforward answer to this question. Whether or not your bank will refund scammed money depends on various factors — such as the bank's policies, the type of scam, how you paid, and how quickly you reported the fraud.
If you believe you or someone you know may be a victim of a cryptocurrency scam, immediately submit a report to the FBI Internet Crime Complaint Center (IC3) at www.ic3.gov or contact your local FBI Field Office and provide as much transaction information as possible.
Can you go to jail for crypto scamming? ›
This could be as simple as creating a website intending to defraud visitors out of their Bitcoin. Depending on the amount defrauded, defendants face between 1 and 30 years in prison, and $1,000 to $10,000 in fines.
Can anyone recover stolen crypto? ›
However, money does leave a trail and you may be able to follow it to the identity of the criminal. Even if you successfully use public ledgers to trace the currency, since most cryptocurrency is decentralized there aren't many routes you can follow to get it back.
Can scammed crypto be recovered? ›
By examining the blockchain, experts can follow the flow of funds from the victim to the scammer. This process helps identify potential avenues for recovering stolen cryptocurrency. Experts utilize sophisticated tools and techniques to analyze blockchain data, providing valuable insights into fraudulent activities.
How long does crypto take to recover? ›
* In general, the cryptocurrency market is known for its volatility, and prices can fluctuate rapidly. It's not uncommon for prices to drop by 20-30% in a matter of days, only to recover shortly after.
How do I get back at crypto scammer? ›
How To Report Cryptocurrency Scams
- the FTC at ReportFraud.ftc.gov.
- the Commodity Futures Trading Commission (CFTC) at CFTC.gov/complaint.
- the U.S. Securities and Exchange Commission (SEC) at sec.gov/tcr.
- the Internet Crime Complaint Center (IC3) at ic3.gov/Home/FileComplaint.
If you've been a victim of fraud, identity theft, or deceptive business practices, you can report them to the Federal Trade Commission. In 2022 alone, the FTC was able to issue more than $392 million in refunds to people who lost money to illegal business practices.
Can crypto payments be refunded? ›
Once confirmed, the transaction is permanently recorded on the blockchain, and altering or reversing it becomes impossible.
Can crypto payments be reversed? ›
Can Bitcoin and other cryptocurrency transactions be reversed or cancelled? No, Bitcoin and other cryptocurrency transactions are designed to be irreversible.
