Cryptocurrency is one of the emerging and famous digital currencies in the present era. It offers many features, including transactions and trading capacities with leverages and trade margins. With the increase in popularity, many more crypto scams are reported and have seen a rise. Many investors and traders choose illegal methods to escape taxes and fees and maintain anonymity for getting several services, including conducting payment transactions, availing services, and purchasing products. In addition, investors choose to have a variety of digital currencies as an investment for securing profit.
Role Of Law Enforcement Agencies In Crypto Scams
With the increasing cases of cryptocurrency theft from cryptocurrency exchanges globally, there comes a dire need to find a professional recovery expert. Another question arises before finding a professional recovery expert: how to recover stolen cryptocurrency?
There has been a wide range of security breaches at famous cryptocurrency exchanges globally, which includes the famous incident of stolen bitcoin, many incidents of cryptocurrency thefts, stolen crypto and private keys, stolen funds, phishing scams in virtual currency, cryptocurrency holdings, cryptocurrency transactions and in initial coin offering, etc. are rare common incidents.
Many scams have been reported in cryptocurrency holdings, dump scams, stolen assets, login details, wallet address, and crypto wallet. If there is this much threat, why are people eager to invest in the cryptocurrency exchange despite the transaction fees and complex process for recovery services? The answer is right there.
Why do Crypto Thefts happen?
This is one of the central questions that need to be answered before finding how to recover stolen cryptocurrency. The first reason is undoubtedly the decentralized nature of cryptocurrency and the working criterion of cryptocurrency exchange, which allows the users to trade crypto anonymously.
The second reason is that cryptocurrency scams happen when people avoid legitimate cryptocurrency platforms and processes. Many fallen victims who have been victims of dump schemes, cryptocurrency scams, Ponzi schemes, crypto theft, or any case where hackers gain unauthorized access admit that they have used illegal methods for cryptocurrency investments.
The ratio of cryptocurrency theft can be minimized if the users and cryptocurrency exchange use the legal procedure equally. Due to negligence of legal recourse, there has been only estimated cryptocurrency theft of 12 billion in 2021. An estimated 2.57 billion has been recorded in 2022.
How To Recognize The Cryptocurrency Scam
There are always some red flags or warning signs when you are about to get scammed in cryptocurrency. It would help if you watched for the security and safety provided by legal authorities when investors and traders come across the following situations:
Promises And Guarantees
When there are promises of enormous turnover for the investments, always consider it a red flag. This is because, like all businesses, cryptocurrency exchanges also profit from price fluctuations.
If the trader or person is offering a promise of a high-profit margin, always consider it risky because it is the trick of scammers to offer risk-free and high-return projects. There is no guarantee in the crypto world. The legal procedure always points out that risk and profit depend equally on price fluctuations. At the same time, the scammers always ensure high-income streams and profit margins.
Untransparent Project
When a project seems to be untransparent, there is some red flag. When a project is transparent in the cryptocurrency world, there is complete information regarding the technology, team, road map, and other required information. The giant red flag you can experience is that a scammer always wants to be secretive.
This point should always be considered at all costs, if there is any delusion, hindrance, or secrecy in any detail of the project, which is transparent and clear, it is commonly a scam, and you should always avoid it. The biggest weapon of a scammer is to offer a high-profit margin, which is never paid at any cost. It is mandatory to conduct thorough research regarding the transparency of the project so you can have a legal way to sort things out.
Quick Actions
The next trick scammers always use is to induce high pressure for quick and illogical actions. The pressure and quick actions lead to impulsive decisions, usually to the scammer’s advantage. If there are all three previously mentioned signs or any of them, you should first cancel the project and report the investor quickly to save the whole ecosystem from the scammers.
How To Understand The Scams?
This is one of the critical questions because there may be no scam, and people are getting doubted for the scam. It is mandatory to understand what a scam is. Let’s go through the details of the crypto scams.
There are three significant types of cryptocurrency scams:
- The first one is known as the Ponzi scheme.
- The second one is known as a phishing scheme.
- The third one is known as cloud mining.
- The fourth one is known as the romance scam.
Let’s go through the details of all of these scams.
Ponzi Schemes
This is one of the oldest schemes of looting and befooling people. You must also have heard of people who offer double the money of your investments. They also offer to share a small portion of your investment, which they return for an extended period.
People become greedy for earning double the amount in a short period. The Ponzi schemes offer benefits and profit to the initial investors to gain trust and popularity. They invest the money in some stock exchange or crypto project. They keep their due margin and give the rest of the profit to the investors. When people start investing massive amounts, they start their action plan.
They keep collecting the investments for an extended period by saying you will get your profit after this period. After gathering all money, they migrate to the countries where Ponzi schemes are legal so they would avoid getting caught even through Interpol.
Phishing Scheme
it is a scheme of tricking people so they can hand over their investment details. This procedure includes access to the login credentials, private to the crypto assets, access to the private key regarding the wallet provider, and passing through the two-factor authentication for complete access to the user’s account at cryptocurrency exchanges.
Cloud Mining
Cloud mining is adding people’s investment into some cloud mining operations, which has no solid restrictions and jurisprudence for legal actions. Through this kind of crypto scam, it is easy for hackers and scammers to steal cryptocurrency.
Romance Scam
Romance Scammers artificially inflate themselves to be someone else. These scammers pretend to be someone else by making fake profiles on social media. The truck people invest their money. After taking their money, they get disappeared forever.
Phishing Scheme
it is a scheme of tricking people so they can hand over their investment details. This procedure includes access to the login credentials, private to the crypto assets, access to the private key regarding the wallet provider, and passing through the two-factor authentication for complete access to the user’s account at cryptocurrency exchanges.
Cloud Mining
Cloud mining adds people’s investment into some cloud mining operations with no solid restrictions and Jurisprudence for legal actions. Through this kind of crypto scam, it is easy for hackers and scammers to steal cryptocurrency.
Romance Scam
Romance Scammers artificially inflate themselves to be someone else. These scammers pretend to be someone else by making fake profiles on social media. The truck people invest their money. After taking their money, they get disappeared forever.
How to recover stolen cryptocurrency?
In this regard, the first thing to do is take immediate action. It would help if you first made yourself calm and composed so your mind can work for the proper legal procedure. In a panic, you risk being re-scammed by scammers who pretend to be running online and even physical forums to recover the stolen cryptocurrency.
- It is normal to feel frustration, anger, and panic attacks, but you should take a deep breath, then try to avoid all impulsive decisions at all costs. After that, you should consult the local law enforcement agencies for help and legal strategies.
- The next step is to document all incidents. It would help if you remembered that all the incidents must be adequately documented so that proper action can be taken against the criminals.
- The next step is preserving all the digital evidence and maintaining a chronological record for the legal authorities to take firm and composed action. The more well-documented and full of evidence a case will be, the more likely the scammers will be behind the bar very soon.
- Now that you have documented the incident and contacted the local law enforcement agencies, the next step is to contact the relevant authorities, including the relevant exchange. There would be the cybercrime units along with the financial regulatory authorities who can collect the data and transactional history from the cryptocurrency exchange for precise and composed decisions.
- The next step is patting your back and finding emotional support because losing lifelong savings is difficult to bear.
- One thing that should be remembered at all costs is that the timely reporting of all the well-documented events is mandatory and is quite crucial because if you timely report the incident, the scammers will have more time to scam more people and save scammed money safely.
There are specific crime branches that deal with cryptocurrency fraud. Transact transactional records on a blockchain ledger is not easy to maintain. The experts have to find just a node, and the rest of the case will be resolved, but in reality, the case is the opposite.
One crypto coin has many fractions, which different people buy. Additionally, the transactions happen in a million in the milli second on the same blockchain ledger and the same note. Finding the cords in the whole mess is an uphill task requiring time, energy, and expertise.
There is no second-guessing in the fact that the experts in legal firms can track down your transactional history, although it takes time. What makes the matter worse in this scenario is that people need to follow the law in the first place to escape the taxes and transactional fees. Again, they try to save the fee by contacting the firms which offer their help online and in physical forums.
These people are now the targeted audience for the scammers who want to re-scam the people by looting the rest of their savings. After getting scammed twice, people want to get their money in a single go. It would help if you remembered that tracing and tracking lost crypto requires time, money, effort, expertise, and patience.