Crypto Scam Recovery
Stolen cryptocurrency is a real possibility in today's digital world. According to a Chainalysis report, $7.7 billion in cryptocurrency was stolen worldwide in 2021 alone. So, what can you do if you find yourself in the unfortunate position of having your crypto stolen?
It might prove to be quite difficult to recover your funds back, but there are steps you can take to increase your chances of getting them back. In this article, you will find all the possible actions you can take in order to attempt to recover your stolen cryptocurrency.
Crypto Scamming: How can you be hacked or scammed?
In the crypto and DeFi space, the number of ways you can get scammed is pretty varied. Here we wrote an article about the most common types of scams that people can fall victim to in the space. Nonetheless, here are some of the most common ones:
- Phishing: Phishing scams are an attempt to acquire sensitive information (such as usernames, passwords, credit card details, etc.) by disguising themselves as a trusted celebrity or entity in electronic communication. Phishing scams often come in the form of emails, messaging apps or social media messages appearing to be from legitimate companies.
- Rugpulls: Rugpulls are exit scams in DeFi that involve creators of a project exiting the project and taking all its funds. The team behind the project will usually market the project heavily prior to exit and then, once it reaches its peak price, they will take the funds. Slow rugs, where the creators take the money slowly, is also possible.
- Crypto pump and dump: This usually happens when an ICO launch happens and the project members pump it and then dump all of the funds at once. It could also be the case that organized and coordinated groups on Telegram, Discord, or another social media platform decide to pump a token and once they make profit, they take it.
- Honeypots: Honeypot scams are also common in crypto. These are usually the types of scams where you can put money into them, but can't really get it out because of issues such as extremely high gas fees coded into their platform's smart contracts.
Recover Stolen Cryptocurrency
If you have been hacked, scammed or believe that your private keys or your seed phrase might have been compromised there are a number of measures you can take.
First and foremost, if you believe that your seed phrases or private keys have been stolen but your funds are still there the best option is to move them to a new wallet. It is best to prevent them from suddenly disappearing due to a hack.
However, if you believe your funds have indeed already been stolen, these are the steps that you should take:
Check your exchange's policies: Some centralized exchanges have policies in place that may cover crypto losses due to theft. If you held your cryptocurrencies with a Centralized Exchange (CEX), you should be able to contact customer support and report the theft. They might be able to help you.
Get in touch with law enforcement: This is probably the most obvious and important step you'd need to take if you think you've been robbed of your cryptocurrencies. Each country should have its own enforcement set up to take note of any theft, even when it comes to cryptocurrencies. What's more is that they might be able to help you recover it.
In North America, your first stop should be the Federal Trade Commission (FTC). The FTC also recommends reporting the scam to Commodity Futures Trading Commission (CFTC), the U.S. Securities and Exchange Commission (SEC), and the Internet Crime Complaint Center (IC3).
If you live in another country, you should contact the commission responsible for reporting scams and fraud. This can be done by calling local government helplines or the police.
Nonetheless, it is important to note that recovering cryptocurrencies might prove to be difficult, but not impossible. As the FTC says, "While it is very difficult to get your money back when you pay using cryptocurrency, you can try to contact the company you used to send the money and tell them it was a fraudulent transaction. Ask to have the transaction reversed, if possible." Here is also some advice the FTC released regarding what you should do once you are scammed according to what you were scammed of.
Finally, it is important to stop using the wallet that has been hacked and switch to a new one. If it has been hacked once, chances are that you can get hacked again. It is best to start again with a clean slate and prevent your funds from being stolen once more. Abide by the mantra of once bitten, twice shy.
Despite the risk of theft, millions of people worldwide still own and trade cryptocurrency daily. If you find yourself the victim of crypto theft, there are steps you can take to try to recover your lost funds. By taking these steps, you may be able to get your stolen cryptocurrency back.