Crypto fraud or scam: what to do if you think you’ve been victimised

Increased risk of crypto fraud and scams

On 5 March 2024, the price of the cryptocurrency bitcoin hit an all-time high. Various other cryptocurrencies have also increased in price during a general rally in the crypto market.

However, this is against a backdrop of various scandals and times of rapid price increases, which are a boon to fraudsters.

Fraud involving cryptoassets is not new. On 16 April 2023, the Sunday Times ran a story entitled “I paid £2,000 for an NFT but scammers stole it”.

In times of large price increases, thefts of digital assets, including cryptocurrencies, are becoming more common.  So, what can you do if you have been the victim of cryptocurrency theft?

What to consider if you think you have been victim to a crypto fraud or scam

Ultimately, and depending on the circumstances, there are various avenues to explore when it comes to pursuing a potential crypto fraud. These avenues include the matter being investigated and pursued through law enforcement, by way of a private prosecution or civil proceedings. Any of these avenues can be complemented by implementing compliant cryptoasset tracing measures.

It is important to act quickly. Consider reporting the alleged fraud to ActionFraud, who provide a comprehensive reporting process and further detailed information on reporting.

There are additional steps you can take which will potentially assist the investigation of any allegation of fraud. Reporting to law enforcement might not necessarily result in them investigating the alleged fraud, as agencies will apply various considerations before deciding whether to take the matter further. It is therefore important to consider steps you can take yourself to assist with any subsequent investigation.

In this regard, one of the options is to consider additional assistance through instructing a specialist private firm to investigate. These firms should conduct a compliance investigation, which can be used to assist further action through law enforcement, or, alternatively, in civil proceedings or a criminal private prosecution, if appropriate.

In addition, specialist firms bring the benefit of being able to utilise specialist tools to track fund flows and gather evidence in a format that should also be admissible in any subsequent proceedings. In theory, the blockchain (where all crypto transactions are recorded) is a transparent record, therefore it should technically be possible to try and trace all transactions and thus evidence the trails of any purported fraudulent activity.

Finally, it is worth ensuring that any investigation is assisted by expert legal advice. Gherson Solicitors bring combined expertise from a criminal, civil and regulatory perspective, underpinned by a firm understanding in cryptoassets and blockchain technology.

Increased reports of crypto fraud and scams – More from Gherson

Last week, Gherson’s criminal litigation, investigations and regulatory team wrote a blog entitled what can you do to try and help avoid a crypto fraud of scam.

Reports of crypto frauds and scams remain on the increase. A recent article by Cyber reports how around £1 million-worth of cryptocurrency scams are being reported by Santander UK customers each month. This article quoted Thomas Cattee, Solicitor in Gherson’s criminal litigation, investigations and regulatory department.

How Gherson can help

If you feel you have been the victim of a crypto fraud and/or scam then Gherson’s white-collar crime and regulatory team can offer advice on any attempted steps to obtain redress and also any associated cryptoasset tracing.

Further, Gherson’s civil litigation team are able to offer support with any civil measures. Finally, the team are able to work alongside expert crypto-tracing companies.

Please do not hesitate to contact us for advice, send us an e-mail, or, alternatively, follow us on X, Facebook, Instagram, or LinkedIn to stay-up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

©Gherson 2024

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