How Can I Get My Money Back From A Crypto Scam?

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The realisation that you’ve been scammed can be devastating and can trigger a raft of different emotions.

‘How could I be so stupid?’ is a common question that victims ask themselves as they confront the fact that they’ve been conned and lost their money.

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People who’ve been scammed online often feel angry, embarrassed, ashamed and worried about how they’re going to tell their loved ones.

Often, the money they’ve lost has been borrowed from friends and family, who they may have promised generous returns to.

After being scammed, many people are left in a precarious financial situation, often facing the very real possibility of losing their home and even their partner.

In many cases victims also see their credit rating impacted, despite finding themselves needing to borrow money to pay for necessities after losing their savings.

The next thing scam victims often ask themselves after the reality has sunk in are ‘how can I get my money back from the scammers?’ and ‘can anyone help me recover my funds?’.

Here, I’ll look at what you can do after losing cash to a crypto scam and who to turn to for help.

Steps you can take to get your money back from scammers

I’ll start with a cautionary word – it’s not easy getting your money back from crypto scammers as I don’t want to give anyone false hope.

However, there are certain steps you can take which may help retrieve your funds, although nothing is guaranteed.

While cryptocurrency doesn’t come with the same legal protections as other forms of payment, and crypto transfers are irreversible, it’s not impossible to track the scammers and secure the return of your cash.

Here I’ve detailed some of the routes available to you to potentially recover your stolen cryptocurrency or get your money back from a crypto scam depending on your circumstances.

Issuing a chargeback

A chargeback is where your credit or debit card provider can attempt to reverse a transaction if you believe you’ve been scammed.

It’s a form of protection offered to card holders that enables your bank to refund the money you’ve lost.

In the UK, a chargeback is different to the legal protection offered by Section 75 of the Consumer Credit Act which is a law that forces credit card providers (not debit) to share liability involving purchases of between £100-£30,000.

In most crypto fraud and scam cases, a chargeback won’t work because you’ve transacted in crypto which is not covered by the rules. However, if you’ve used a debit or credit card things might be different.

To make a chargeback claim you’ll need to provide details about the purchase, including the ‘sellers’ ie scammers details, which may prove to be another stumbling block.

The crypto scammers you’ll have dealt with are likely to have used fake identities, fake social media profiles and channels and disposable mobile phones. Nor will you have their address.

I’ve got to be honest and say this makes it unlikely that you’ll be able to successfully pursue a chargeback, especially as the scammers nearly always insist that you use crypto to transact with them.

However, if you did use your credit or debit card to pay a crypto scammer, it’s worth pursuing a claim with your card provider.

Also, if you used PayPal or a money transfer service, such as Western Union or MoneyGram, there is a slim possibility that you might be able to secure the return of your funds.

Collect as much information as possible about the scammers (see below) before reporting it to the relevant department with your card company.

Related post: How to launch a Chargeback claim

Report the scam to the cryptocurrency exchange (if used)

If the scammers have asked you to create a wallet on a legitimate crypto exchange in order to transfer funds to their wallet, it’s worth reporting the scam to the platform involved.

I’ve spoken to scam victims who’ve been asked to open accounts at Coinbase, Binance, Crypto.com and several other of the major exchanges in order to purchase crypto to fund the scheme they’ve got involved in.

The exchanges may not be able to help secure the return of your funds, but they might be able to freeze transactions or help trace the scammers by looking for patterns in behaviour and wallet use.

The more people who report the scammers the more evidence the exchanges are able to gather and help them act against the scammers.

The same applies to reporting scams to the relevant authorities/trade bodies in your country (see below).

Crypto scam recovery firms

It’s often assumed that crypto transactions are completely anonymous, but this is often far from the case, especially if the scammers are careless.

Crypto transactions, such as using Bitcoin, are typically stored on a public ledger which includes all the details of the transaction, including the recipient’s wallets.

There’s other data that accompanies a typical crypto transaction as well which can be used to follow transactions around the globe.

Scammers often use bitcoin mixers to cover their tracks, but even these are not always infallible.

There are a number of specialised crypto scam recovery firms operating in the UK and around the globe who use the information and other methods to secure the return of your crypto.

There are also several solicitors, lawyers and legal firms which have teams dedicated to these scams. Some of these firms work on a percentage basis, while others charge a flat fee.

Also, it’s worth noting that certain companies will only engage clients who have lost a significant sum, ie £1 million or more, often in the corporate sector.

Yet there are several firms featuring testimonials from individual clients who’ve lost much smaller amounts and been reunited with their funds.

It’s important that you thoroughly research a company before employing them to attempt to recover your lost crypto as there are also scammers operating in the crypto recovery sector as well.

Related link: Can crypto recovery experts recover my stolen coins?

What should I do if I’ve lost money to a crypto scam?

Although, as I’ve previously said, it’s very difficult to get your money back from crypto scammers, there are a few things you can do to improve your chances in addition to the steps above. These include:

Keep a note of the Transaction ID code, also called a TXID.

If the scammers have asked you to send funds to a crypto address, this transaction will generate a transaction hash, known as a TXID, when it is verified and added to the blockchain.

The TXID is a unique string of characters that acts as a permanent identifier of each transaction and as such can be tracked by authorities and crypto recovery companies.

Although crypto transactions can be tracked using other methods, making a note of TXID will help.

You can find the TXID of any transaction by entering a wallet address into the checker provided by organisations such as blockchain.com and finding the individual transaction.

Document everything that’s happened during the scam

Trying to recall the specifics of a scam can be difficult months after the event as things tend to move quickly and you’re contending with a range of difficult emotions.

Make a note of everything that’s happened as soon as possible. Include names, phone numbers (if you have them), social media IDs, web addresses and online groups where you’ve interacted with the scammers.

Record how much money you’ve lost, where you sent it to, the dates, and any other information which you think might help authorities track down your lost funds.

Keeping a detailed record of what’s happened will help crypto investigators and the authorities build a more complete picture of how the scammers are operating.

Can the authorities help me get my money back from a crypto scam?

I always urge people to report scams to the authorities in their country, even if there’s very little they can do to help recover the funds.

Passing on the details of a scam helps the authorities build a better picture of how the scammers work and, if they do catch them, ensures they can return your funds as you’re on their system.

You can also report crypto scams to the relevant fraud authorities in your country for the same reasons.

In the UK, you can report crypto scams to Report Fraud – a specific body administered by the police to help fraud and scam victims.

Reporting scams also helps other people. Not only does it gives the chance of catching the scammers, but often they’ll put out warnings on social media about specific scams that are operating.

Reporting you’re scam means, if nothing else, you’ll be doing your bit to crackdown on the crooks.

What are some of the common crypto scams?

Crypto scams take many different forms and evolve rapidly.

However, there are a few common themes that seem to accompany many of the scams out there. These include:

Get rich quick promises

Offering huge returns over a short period of time. If anyone promises to make you rich without any effort through crypto, don’t trust them.

Think about how realistic it would be to make the returns promised and why they’d be offering this to you directly.

Promising zero risk

No investment is without a certain degree of risk so anyone claiming a risk-free route to crypto riches is a scammer.

Risk is an important element of financial education and should be applied to any form of investing, whether crypto or traditional markets.

Romance crypto scams

Many of the people I speak to who’ve been scammed say they were first approached by someone at random who was flirtatious and keen to strike up a friendship.

This is often through a dating website, but the scammers also pose as young attractive people in apps such as Telegram and WhatsApp.

This is all based on the classic notion of the romance scam and still catches people out on a regular basis despite many high profile campaigns warning of this.

Fake crypto trading platforms

Scammers often direct victims to websites that have been set up to mimic crypto trading platforms.

However, it’s easy to check out the legitimacy of a platform online by simply Googling the name and looking for reviews or asking if it’s a scam.

There will usually be someone who’s written about it before you. If you can’t find any reviews then that’s a red flag in itself.

I’ve also written this ultimate guide to spotting a crypto scam that you can refer to before signing up.

An example of a typical crypto scam

A common scam that I’ve written about repeatedly is where victims are urged to invest in a crypto trading platform by someone they’ve met online, with the promise of huge returns.

They open an account, deposit crypto (often purchased from a legitimate exchange) and soon start to see their balance soaring.

However, when they come to withdraw their funds the scammers demand a payment – usually a percentage of the whole pot including fake profits – to release the money.

They often cite reasons such as the need to pay a commission or a tax in the jurisdiction of the investment.

However, this is all part of the scam and designed to extract even more funds out of the victim.

If the victim pays the ‘commission’ further demands for money will follow and this will continue until the victim stops coughing up the extra cash.

I’ve even heard of victims being threatened if they don’t pay, with some being told they’ll be reported to their local tax authorities for breaking the law.

Check out this list of crypto scams to avoid for details of some of the current and former crypto scams doing the rounds.

How do I avoid being scammed?

This is slightly difficult to answer as what may seem like an obvious scam to some may not to others.

This is partly due to an individual’s financial literacy, especially when it comes to crypto, but also how trusting they are or susceptible to flattery.

A golden rule to follow is: if it seems too good to be true, it probably is. In any situation where someone is asking you to part with your money you should:

Do your due diligence

Thoroughly check out any platform/company before investing in them. Use every resource available to you, including search engines and social media platforms.

Think how likely the returns on offer are

An annual return of 5-8% on traditional investments is considered good, so if someone’s offering you 100% return in a fortnight it’s clearly not realistic.

Any return like this means it’s a scam.

Think about the source of the investment opportunity

If someone you’ve only just met online is suddenly offering you a terrific investment opportunity, think about why they’d be doing this.

How do you know they’re even who they say they are? Have they contacted you out of the blue and are quick to strike up a relationship? These are all huge red flags.

Crypto is not a magic money tree

Some people have made huge sums of money in crypto, but these tend to be either people who’ve got in early, or professional traders who’ve studied the market for years and have large pots of money to invest.

There are opportunities to make significant gains in the crypto markets, but also massive losses as well.

There is no easy route to becoming a crypto millionaire so if someone promises you one, you should never trust them.

Crypto is different to fiat money

Crypto doesn’t come with the same consumer protections as traditional transactions so you have to be extra careful when using it to pay for something.

Ask yourself why someone is only accepting crypto for an investment deposit?

All legitimate financial institutions in the crypto sector accept deposits in a range of ways, including fiat bank transfers and debit card payments.

If someone is saying they’ll only accept crypto for an investment scheme this is a sure sign that they’re a scammer.

Final word

Crypto is a fascinating, exciting and fast moving space full of opportunities to not only make money but also improve the lives of millions of people by giving them financial freedoms they wouldn’t otherwise have.

But while it’s still mostly unregulated, scammers will thrive, especially as many people have little knowledge about how crypto actually works and what’s legitimate or not.

We’ve all been sold the idea of the crypto millionaire draped over a supercar on social media, but the reality is that it’s much harder to make money in crypto than most people think, unless you’re extremely lucky.

There’s always been a get-rich-quick scheme for the ages and crypto is no different.

Arm yourself with the knowledge readily available online and never believe someone who tells you they can make you rich overnight and you’ll be much better equipped to navigate some of the scams you’ll encounter on your crypto journey.

Related post: Crypto scam help and resources