The FBI says rogues stole around $10 million from crypto fraud victims in just 12 months after posing as helpful lawyers offering to get their lost tokens back.
Between February 2023 and 2024, scammers preyed on American victims while they were already in dire straits, taking advantage of their financial vulnerability to scam them a second time in what must be seen as a new low even for that particular brand of filth.
It is the latest update from the FBI’s Internet Crime Complaint Center (IC3) on the ongoing issue, which was first published last August.
The Reg heard that there was a rise in these fake companies claiming to help recover stolen crypto in exchange for fees that would never be repaid, but this is the first time IC3 has placed a monetary value on the crime.
These “law firms” contact victims on social media and messaging platforms, IC3 said, and all claim to have the proper authority to conduct successful fraud investigations, while in fact they have no business issuing seizure orders on, for example, cryptocurrency companies .
In some cases, the scammers try to claim that they are working with the FBI, the Consumer Financial Protection Bureau (CFPB), or some other type of US government agency or financial institution to add a touch of legitimacy to the procedure.
This should ring alarm bells, especially if some government investigative team is actually charging victims for their services.
In several cases seen by real law enforcement agencies, a variety of tactics have been used, ranging from asking for an advance on costs, i.e. paying the final balance at the end of the ‘investigation’, to instructing victims to make payments for “back taxes and other charges.”
When the previous alert came in August, IC3 said that once the payments were made, the scammers would often cut off contact completely or provide an incomplete or incorrect report and ask for additional money to complete the chargeback.
It is also not unheard of for scammers to request personal information from victims, which we can assume will also likely be misused in some way.
“Be wary of advertisements for cryptocurrency recovery services,” the warning reads. “Research the advertised company and beware if the company uses vague language, has a minimal online presence and makes promises about the ability to recover money.
“If an unknown person contacts you claiming to be able to recover the stolen cryptocurrency, do not reveal any financial or personally identifiable information or send any money.
“Law enforcement does not charge victims to investigate crimes. If anyone claims to have ties to the FBI, please contact your local FBI field office to confirm.”
The Department of Financial Protection and Innovation has a simple crypto scam tracker on its website that can be used to look for known scam operations. However, contacting the FBI wouldn’t be the worst option, just to be sure.
More than making money quickly
Earlier this year, the FBI warned that crypto fraud was costing the US economy more than ransomware, with reported losses of approximately $4.57 billion over the past 12 months.
Although the cost of ransomware was estimated at a surprisingly low $59.6 million, especially as multi-million dollar ransoms were paid by companies like Change Healthcare, it is likely that this figure is significantly higher due to low reporting rates.
Crypto scams not only affect the average consumer, but also legitimate, knowledgeable businesses Reg interviews have previously shown.
After Ahad Shams, co-founder of Webaverse, told us about his story of losing $4 million to a well-organized group, more victims began speaking out and have now been brought together in a Telegram channel to share their stories of regret to share.
Even real crypto companies got caught up in this and fell for the elaborate scams that involved in-person meetings abroad in beautiful European hotels.
For some victims, it was just a bit of social engineering and monetary loss. Others told their stories on that Telegram channel and the same scam organization is said to have drugged victims and driven others to the point of suicidal thoughts. Many people were robbed of millions.®