The FBI says in just 12 months, scumbags stole circa $10 million from victims of crypto scams after posing as helpful lawyers offering to recover their lost tokens.
Between February 2023-2024, scammers were kicking US victims while they were already down, preying on their financial vulnerability to defraud them for a second time in what must be seen as a new low, even for that particular breed of dirtball.
It’s the latest update from the FBI’s Internet Crime Complaint Center (IC3) on the ongoing issue which was first publicized in August last year.
The Reg heard there was a rise in these fake companies cropping up, which claim to help recover stolen crypto in exchange for fees that would never be returned, but this is the first time IC3 has put a monetary value to the crime.
These “law firms” contact victims on social media and messaging platforms, IC3 said, all claiming to have the proper authority to carry out successful fraud investigations, when in fact they have no business serving seizure orders to the likes of cryptocurrency companies.
In some cases, the scammers try to claim they’re working with the FBI, Consumer Financial Protection Bureau (CFPB), or some other kind of US government agency or financial institution to add a whiff of legitimacy to the proceedings.
Alarm bells should be going off here, especially if some kind of government investigation team is actually charging victims for their services.
Various cases seen by the real law enforcement authorities have included all manner of tactics used, ranging from asking for up-front fees to be paid before the final balance at the end of the “investigation” to instructing victims to make payments for “back taxes and other fees.”
When the prior warning came in August, IC3 said once these payments were made, the scammers would often either cut contact altogether or hand over an incomplete or inaccurate report and request additional funds to complete the recovery.
It’s also not unheard of for scammers to request personal information from the victims, which we can assume will also probably be abused in one way or another.
“Be wary of advertisements for cryptocurrency recovery services,” the alert reads. “Research the advertised company and beware if the company uses vague language, has a minimal online presence, and makes promises regarding an ability to recover funds.
“If an unknown individual contacts you and claims to be able to recover stolen cryptocurrency, do not release any financial or personal identifying information and do not send money.
“Law enforcement does not charge victims a fee for investigating crimes. If someone claims an affiliation with the FBI, contact your local FBI field office to confirm.”
The Department of Financial Protection and Innovation has a simple crypto scam tracker on its website which can be used to look up known scam operations. Contacting the FBI wouldn’t be the worst route to go though, just to be safe.
More than a quick buck
Earlier this year, the FBI warned that crypto scams were more costly to the US economy than ransomware, with reported losses in the region of $4.57 billion over the 12 months prior.
While the cost of ransomware was pegged at a surprisingly low $59.6 million, especially with multi-million-dollar ransom fees being paid by the likes of Change Healthcare, it’s likely the figure is considerably higher due to low reporting rates.
Crypto scams not only affect the average consumer, but legitimate, knowledgeable businesses too, as exclusive Reg interviews have previously revealed.
After Ahad Shams, co-founder of Webaverse, told us about his story of losing $4 million to a highly organized group, more victims started to speak out and are now joined together in a Telegram channel to share their tales of regret.
Even genuine crypto firms were caught up in it all, falling for the elaborate scams that involved overseas face-to-face meetings in beautiful European hotels.
For some victims, it just involved some social engineering and a loss of funds. For others, telling their story on that Telegram channel, the same scamming organization was said to have drugged victims and driven others to the point of suicidal ideation. Numerous people were robbed of millions.®