FBI Alerts Public to New Cryptocurrency Scams by Fake Law Firms

The FBI has warned about a new scam trend involving fraudsters posing as lawyers offering cryptocurrency recovery services. 

The agency’s Internet Crime Complaint Center (IC3) previously alerted the public to an increasing number of fake law firms that deceive users by claiming they can recover assets lost in prior scams.

According to the FBI, these scammers mislead their victims into thinking they are collaborating with government entities, including the Consumer Financial Protection Bureau (CFPB) and the FBI, to recover lost digital assets. This tactic aims to gain the victims’ trust and make the fraudulent operation appear legitimate.

Millions lost to Crypto scam

Reports from Bleeping Computer indicate that scammers also provide fake links to genuine financial service providers and money exchanges. This method further convinces victims of the scammers’ credibility and their supposed ability to trace and recover lost funds. Between February 2023 and February 2024, the FBI estimates that over $10 million were stolen by fraudsters posing as lawyers. 

These criminals claim to assist victims in recovering their lost tokens but instead siphon off even more money from those already victimized by other scams. Earlier this year, the FBI highlighted the severity of cryptocurrency scams, noting they were more damaging to the U.S. economy than ransomware attacks. 

The reported cases of crypto scams were estimated at around $4.7 billion. The FBI has stressed the importance of being cautious about advertisements for cryptocurrency recovery services, as these are often used to lure unsuspecting victims into further scams.

Common scamming tactics

Scammers often request personal information from their victims, such as banking details, under the pretense of needing this information to recover investments. Additionally, they demand that victims pay “back taxes” and other fees to facilitate the recovery of their funds. These tactics are designed to extract as much money as possible from the victims before they realize they have been scammed again.

State authorities and legitimate agencies may track and freeze stolen crypto, sometimes recovering it and sending it to more secure wallets or returning it to the victims. However, scammers exploit this process by demanding an upfront fee to initiate the recovery process, promising that the rest of the payment can be made upon full recovery of the funds. Once the initial costs are made, the scammers often sever communication with the victims, leaving them with no recourse.

The FBI emphasized that law enforcement does not charge victims a fee for investigating crimes. They urged individuals to verify the credentials of anyone claiming to be affiliated with the FBI or any other authority by contacting their local FBI field office.

Scams affect all demographics

Crypto scams are not limited to a specific demographic and affect average consumers, elite individuals, and businesses. The FBI has warned people to remain vigilant and conduct thorough background checks on anyone who claims to have the authority or capability to recover lost cryptocurrency assets.

The agency advises skepticism towards unsolicited offers of cryptocurrency recovery services and verifies the legitimacy of such offers through independent research and consultation with trusted authorities. This approach can help prevent individuals from falling victim to these sophisticated scams that prey on those already vulnerable after experiencing a loss.

The FBI’s warning underscores the importance of caution and due diligence when dealing with cryptocurrency recovery services. By staying informed and verifying the legitimacy of recovery offers, individuals can protect themselves from further financial harm.

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