Bitcoin and Cryptocurrency fraud, theft and investment scams

Boasting of potentially sky-high financial returns, the trading of cryptocurrencies and the investment in NFTs have appeared to be very attractive ‘investment’ opportunities in recent years.

Whilst some people have genuinely benefitted from opportunistic (lucky) investments in this sector, a sizeable chunk of the profits that are claimed to derive from such investments are fictitious, promoted by scammers, trying to snare new victims.

A Common Problem

We have recently been inundated with enquiries from victims of crypto scams. Typical crypto scams include (to name only a few):

romance frauds;
celebrity fake endorsements;
blackmail or extortion;
phishing;
mis-selling of investment schemes; or
theft of currency from an online wallet.

We explain the above scams in more detail in our Q&A section (below), but if you are still unsure, please contact us to discuss it further.

We Can Help

Whilst it has traditionally been difficult to locate stolen cryptocurrency, for example, it is not impossible and advances in the technology used by tracing agencies have helped. Further, recent landmark judgments in the English courts have made it possible to seize stolen crypto assets with increasing certainty (a crypto asset such as cryptocurrency or an NFT is now confirmed to be ‘property’ under English law).

In order to help the victims of fraud, we provide an easy to access, easy to use, legal advice and representation service, providing (where we can) fixed costs for each stage of the investigation and recovery process. We work in conjunction with leading specialist crypto barristers and tracing agents.

Costs

Please note that we are only able to act on cases whose value exceeds £75,000, due to the costs inherent in this type of litigation.

Further, due to the nature of such cases, we are unable to offer a contingency "no win-no fee" type funding agreement.

Recent Work

Most recently, successfully recovering £300,000 of Bitcoin, Ethereum and Algorand from suspended funds. In this case, the client commented:

"Thank you very much. I really appreciate the help.
There is probably a fine line between fear and respect. You certainly have my respect."

Frequently Asked Questions

What are common Crypto Scams?

Scammers are known to pose as famous consumer experts, celebrities, businesspeople, or cryptocurrency influencers. To capture the attention of potential targets, many scammers promise to match or multiply the cryptocurrency sent to them in what is known as a giveaway scam. Well-crafted messaging from what often looks like a valid social media account can often create a sense of validity and spark a sense of urgency. This mythical “once-in-a-lifetime” opportunity can lead people to transfer funds quickly in hopes of an instant return.

It is wise to consider “if something sounds too good to be true, then it probably is” with regard to investing (or most things in life). Sky-high returns are promised in investment scams, where investors are encouraged to pay more for higher returns. It is only when the investor (victim) tries to remove their funds or promised returns, that they find they cannot.

Another popular social engineering method scammers use is to send blackmail emails. For such emails, scam artists typically claim to have damaging personal information, and threaten to expose it unless the victim shares private keys or sends cryptocurrency to the scammer.

It is commonly through dating websites that unsuspecting targets are tricked into believing they are in a real long-term long-distance relationship. Or it may be that the scammer ‘slides into the DMs’ of the victim on WhatsApp/Telegram. When trust has been gained, conversations often turn to lucrative cryptocurrency opportunities and the eventual transfer of either coins or account authentication credentials. This is a very common type of fraud.

This is a new type of scam, involving cryptocurrency. The name comes from the expression “pulling the rug out.” In this scam, a developer attracts investors to a new cryptocurrency project, then pulls out before the project is built. This leaves the investors with a worthless currency.

A Ponzi scheme is an investment scam that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk.

Scammers send emails with malicious links to a fake website to gather personal details, such as cryptocurrency wallet key information and currency is then stolen from the wallet.

NFTs are increasingly popular and are seen as a way to make a good return on investment, and reference is often made to the Bored Ape Yacht Club NFT project as a sign of potential success. However it is not uncommon for in investor to be mis-sold an NFT. It may be that rights or financial returns are promised which the NFT does not deliver, and the detail of the smart contract (where such rights are set out) is withheld from the victim until they buy the NFT.

What are warning signs of a potential scam?

A guarantee that you'll make money: don't believe such promises as they indicate a scam, even if there's a celebrity endorsement or testimonials, since these can be easily faked.
Big payouts with guaranteed returns: "Guaranteed" returns are a big red flag.
Free money: Whether in cash or cryptocurrency, free money promises are always fake.
Big claims without details or explanations; be very skeptical about such claims.

Contact us

Our expert fraud solicitors recover high-value lost assets for clients across the globe and will be happy to have an initial discussion with you, at a time to suit you, to work out how best we can help.

Call us on 020 7632 4300 or make an enquiry online.