How can I track, trace and recover my cryptocurrencies from a scammer?

21 Nov 2023, 22 mins ago

Digital asset scammers are increasingly using social media, online platforms, texts, phone calls and emails to deceive victims into giving up their personal details and their money. So, what can individuals do to try and avoid potential fraud and scams?

Be careful online and specifically on social media

Indeed, the FCA recently stated an aim to target advice at individuals online and through social media. This comes at a time when people are spending increasingly more time online (partly due to the recent pandemic).

Do not be distracted by “celebrity endorsements” or price turbulence.

Crypto prices appear to be increasing again, which some will argue correlates to increased reporting of crypto fraud. However, instead focus on making sure to:

Heed Action Fraud’s advice and check the FCA’s Register

In order to identify and avoid such scams, individuals would be well advised to heed Action Fraud advice and also check the FCA’s register. More specifically:

  • Do not assume it is real – professional-looking websites, adverts or social media posts do not always mean that an investment opportunity is genuine. Criminals can use the names of well-known brands or individuals to make their scams appear legitimate.
  • Stay in control – avoid uninvited investment offers, whether made on social media or over the phone. If you are thinking about making an investment, thoroughly research the company first and consider getting independent advice.
  • Make the right checks – Firms providing regulated financial services must be authorised by the FCA. You can check whether they are authorised on the FCA’s Register. Use the contact details on the Register, not the details the firm gives you, to avoid ‘clones’.

Finally, further follow Action Fraud’s advice, which includes being wary of online and social media adverts promising high returns.

What can you do if you have been the victim of crypto theft or fraud?

More generally speaking, 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, pursuing the matter by way of a private prosecution, or pursuing the matter by way of 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 Action Fraud, 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 also 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 benefits 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 LLP bring combined expertise from a criminal, civil and regulatory perspective, underpinned by a firm understanding in cryptoassets and blockchain technology.

And finally, follow old wisdoms

Especially the old adage that if something sounds too good to be true, then it probably is!

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 TwitterFacebook, 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 2021