Cryptocurrencies, booming in popularity, attract both legitimate investors and fraudsters. We are a law firm specialised in crypto assets and we receive numerous requests regarding crypto scams.
This article aims to help identify signs of a cryptocurrency scam and understand how to act to recover funds. For more information on scams in general, visit our article.
Typical signs of crypto scams
- Promises of unrealistic returns: Fraudsters often promise huge returns in a short period. If a platform guarantees risk-free profits or disproportionate returns (e.g., 20% per day), this is a red flag.
- Pressure to invest quickly: Scammers often use the fear of “missing out on an opportunity” to push people to act quickly, without giving them time to verify the authenticity of the offer.
- Unregulated platforms of crypto: Ensure that the platform is registered with the relevant financial authorities. An absence of registration is an indicator of fraud.
- Suspicious communications with the broker: Use of unprofessional or anonymous email addresses. Fake identities on social media. Poorly written messages or automatically translated ones.
- Unconventional or untraceable payment requests: Scammers often prefer cryptocurrency transactions because they are difficult to trace. They may also request payments via international transfers to high-risk countries.
What do scammers do with the stolen crypto funds?
Once the diverted funds are received in their wallets, fraudsters proceed to multiple transactions of varying amounts to intermediate wallets. This method aims to complicate the traceability of the funds. Eventually, the funds usually converge into a final wallet.
At this stage, fraudsters attempt to convert or launder the cryptocurrencies legally, often by converting them into fiat currency and withdrawing them through financial institutions.
In fact, this strategy aims to make fund recovery difficult. Therefore, it is important to contact our firm as soon as possible to maximize your chances of recovery crypto scams.
What to do if you are a victim of crypto scams?
Before taking any action, compile evidence of the crypto scams:
- Screenshots of communications and transactions.
- Email addresses, phone numbers, and any information on the fraudsters.
- Proof of transfers.
Moreover, it’s important to collect the addresses (wallets) of the fraudsters where the funds were transferred. Also, gather the date, time, platform, and hashes (identifiers) of the transactions. These details will be essential in tracing the diverted funds and determining their current location (wallet and platform).
File a complaint for digital currency fraud
In case of fraud involving cryptocurrencies, several institutions can be contacted:
File a report with law enforcement
It is essential to provide all available evidence and explain the facts clearly and in detail, especially the circumstances of the scam and the amounts involved.
Complaint with the public Prosecutor
The complaint should include a detailed description of the facts, collected evidence (documents, transaction histories, exchanges with fraudsters), and an explicit request for the opening of an investigation.
Complaint with an investigating Judge
Finally, in cases involving international networks or significant amounts, it is advisable to file a complaint with civil party constitution before the competent court. This allows direct contact with the investigating judge, who will have expanded powers to conduct an in-depth investigation.
The investigating judge is authorized to carry out thorough investigations, in collaboration with the Judicial Police and the cybersecurity department, such as international cooperation with exchange platforms or foreign jurisdictions to trace the funds and identify the perpetrators.
Why choose Arthur & Marin? Crypto specialists
We offer our expertise in financial law and new technologies to:
- Conduct in-depth analysis of the scam: Identification of fraudulent mechanisms and collection of essential evidence.
- Draft a detailed legal report tracing the transactions made by the fraudsters.
- File a complaint: Assistance in drafting and submitting complaints to the relevant authorities.
- Fund recovery: Actions to block identified assets and recover the diverted amounts from platforms.
In addition, acting quickly is essential to increase the chances of recovering crypto funds and minimizing losses. Crypto scams can have severe financial consequences. Visit our guide on cryptocurrencies in Europe: repatriation, taxation, and scams, for more information.
Lastly, if you are a victim, contact us at info@arthurmarin.com or call +32 465 345 345 for personalized legal assistance and recover your funds.
