In recent years, the number of cases involving crypto fraud has increased significantly. While market volatility used to be the main concern for crypto investors, today they are increasingly falling victim to sophisticated scams. The traditional poorly written phishing email has given way to professional-looking investment platforms, convincing advertisements and even deepfake videos.
For many victims, it feels as though their money has disappeared for good. After all, some believe that crypto is anonymous and untraceable. To be clear, this is not the case.
Although successful recovery can never be guaranteed, there are indeed legal options available today.
How do fraudsters operate nowadays?
Fraudsters are becoming increasingly professional in their methods.
Potential victims often first encounter an “investment opportunity” through social media, sponsored advertisements or fake news articles. Sometimes well-known entrepreneurs, media personalities or athletes are used without their knowledge in fictitious interviews or testimonials to gain people’s trust.
This is often followed by a phone call with a so-called expert who emphasises that investing in crypto is easy and requires no prior knowledge. The investor only needs to make a small initial deposit, after which specialised managers supposedly take care of the rest.
It is precisely this low barrier to entry that makes many victims vulnerable. Fraudsters exploit enthusiasm, trust and the fear of missing out on a unique opportunity.
From a small investment to major losses
Crypto scams very often follow the same pattern.
After making a small initial investment, the victim gains access to a professional-looking platform displaying attractive returns. Charts show impressive profits, making it appear as though the investment is performing successfully. This apparent success convinces many people to invest additional amounts.
Problems only arise when they try to withdraw the accumulated balance. Suddenly, additional conditions appear. Taxes supposedly have to be paid first, an account needs to be verified or administrative fees are required before the profits can be released.
In reality, these additional payments serve only one purpose: to extract even more money from the victim. Once the fraudsters have received enough, they seem to disappear off the face of the earth. The platform becomes inaccessible and the contact persons stop responding.
When the scam starts all over again
Remarkably, victims are sometimes contacted again afterwards.
So-called specialists, recovery agents or even alleged lawyers claim that they can recover the lost crypto. In exchange for an advance payment to cover the initial costs, they promise to recover the stolen assets.
In many cases, however, this is simply another form of fraud. Victims who have already suffered financially and emotionally are deceived once again by the hope of recovering their losses. Both the FPS Economy and the Federal Judicial Police explicitly warn against these so-called recovery scams.
Is lost crypto really untraceable?
One of the biggest misconceptions is that crypto is completely anonymous.
Public blockchains permanently record every transaction. Although a wallet address cannot automatically be linked to a specific identity, blockchain analysis often makes it possible to reconstruct the flow of funds and determine which platforms the assets have moved through.
Moreover, crypto-asset service providers are becoming increasingly strictly regulated. When stolen crypto eventually reaches a centralised trading platform, this may, in certain cases, provide leads for requesting additional information.
This does not mean that recovery is easy, but it does mean that victims are not necessarily powerless.
What legal options are available?
A criminal law approach is often an important first step.
Filing a complaint and joining the criminal proceedings as a civil party may lead to a criminal investigation in which information is requested from the service providers involved and financial flows are investigated further. The investigating judge may also be asked to order specific investigative measures, such as freezing identified accounts for which KYC data is available.
Depending on the circumstances, the offences involved may include fraud, computer fraud, computer-related forgery, hacking, etc.
What should you do immediately after discovering the fraud?
In practice, we often find that victims wait too long before taking action. Yet time can be a crucial factor.
It is important to preserve all available evidence. This includes screenshots of the investment platform, emails, WhatsApp messages, telephone numbers, wallet addresses, transaction records and proof of payment.
In addition, do not make any further payments, even if you are told that taxes, release fees or administrative formalities are required to release your funds.
You should then report the matter to the police as soon as possible and contact your bank or the financial institution involved. If personal security information has been shared, the necessary blocking measures must be taken immediately.
Prevention is better than cure
Although fraudsters are becoming increasingly inventive, a number of simple precautions can prevent many problems.
Always check who you are doing business with. Verify whether the company actually exists, check whether warnings have been published by the FSMA and/or the Federal Judicial Police, and be particularly cautious if you are pressured into making a quick decision.
Do not be tempted by promises of guaranteed or excessive returns either. If a return seems too good to be true, it usually is.
Conclusion
Crypto fraud is complex from both a legal and technical perspective. International financial flows, anonymous intermediaries and platforms that quickly disappear make every case different.
By acting quickly, preserving evidence and seeking legal advice in good time, the available options can be used to their fullest extent. The combination of blockchain analysis and criminal investigative measures offers more possibilities today than is often assumed.
Have you fallen victim to crypto fraud, or are you unsure whether legal action is still possible in your situation?
Do not hesitate to contact one of our experts. Together, we will assess which options remain available and which strategy is most appropriate to safeguard your interests as effectively as possible.
