Cryptocurrency Fraud Lawyer | Legal Support for Crypto Scam Victims

Types of Cryptocurrency Fraud and Scams

Cryptocurrency fraud has surged alongside the rapid expansion of the digital currency economy, with billions stolen from U.S. victims over the last several years.

As digital assets and virtual currency continue to gain mainstream acceptance, scammers have developed increasingly sophisticated methods to exploit inexperienced investors and long-time users alike.

Federal reports show that losses tied to investment fraud and crypto-enabled scams have soared into the billions annually, prompting federal prosecutors to launch more investigations into large-scale operations.

Typical victims span a wide range: from retirees exploring new digital investments, to young professionals using mobile trading apps, to immigrants targeted through social media or multilingual scam networks.

Many schemes take advantage of emotional manipulation, fabricated platforms, and the complexity of the crypto market, making it difficult for victims to recognize the danger until their funds disappear.

Others rely on technical deception, such as phishing links or malware, to gain access to digital wallets or private keys.

Because these schemes are diverse and constantly evolving, understanding the major categories of fraud is essential for anyone seeking to avoid becoming a defrauded investor.

Types of crypto fraud and scams include:

• Pig butchering scams – long-term relationship-based fraud that pressures victims to invest in fake platforms.
• Fake exchanges and fraudulent dashboards – websites designed to mimic legitimate platforms and steal deposits.
• Fraudulent initial coin offerings (ICOs) – token sales built on false claims, fabricated teams, or nonexistent technology.
• Ponzi-schemes and ponzi-like schemes – scams that pay early participants using the deposits of newer victims.
• SIM card swap hacks – phone-number hijacking that gives scammers control of 2FA and exchange accounts.
• Phishing and digital hacking attacks – links or malware that steal login credentials, private keys, or wallet seed phrases.
• Security breaches involving exchanges or custodians – unauthorized access leading to large-scale asset theft.
• Identity theft–based fraud – scams using stolen digital information to impersonate victims or create false accounts.

Why Cryptocurrency Fraud is Increasing

The rapid expansion and mainstream adoption of digital assets and cryptocurrency transactions has created a much larger pool of potential targets, making fraud more lucrative for scammers.

In 2024, total global crypto-fraud revenue reached an estimated $9.9 billion, and some firms project that amount could rise even higher as more investors enter the market.

Among the most rapidly growing schemes are “pig-butchering” scams, which combine romantic or emotional manipulation with promises of high returns.

These alone accounted for a significant share of scam revenue and have expanded quickly since 2023.

Scammers are leveraging newer technologies, including generative AI, automated messaging, and coordinated social media outreach, to scale operations and target more individuals with less effort.

The pseudonymous and decentralized nature of cryptocurrencies often makes it difficult for victims to verify counterparties or spot warning signs, lowering the barrier for fraudsters to exploit trust and naiveté.

Many fraud schemes rely on complex and rapid transfers through multiple wallets or platforms, making recovery or tracing extremely difficult, which emboldens scammers to operate more frequently and aggressively.

As digital investments draw interest from older and less tech-savvy demographics (including retirees and first-time crypto users), fraudsters find a vulnerable audience unfamiliar with blockchain risks or security best practices.

Regulatory ambiguity and uneven global enforcement allow scammers and fraudulent operators to exploit cross-border jurisdictions, weak oversight, and inconsistent controls, creating safe havens where crypto fraud can flourish.

Can Stolen Cryptocurrency Actually Be Recovered?

In some cases, stolen cryptocurrency can be recovered, but only under specific circumstances and never through technical reversal of a transaction.

Because transactions utilizing blockchain technology are immutable, recovery depends on whether law enforcement can identify and seize wallets controlled by crypto scammers.

When that happens, cryptocurrency companies and exchanges may provide records or cooperation that helps link victims’ losses to the seized assets.

Victims must document the funds contributed, communication logs, wallet addresses, and any relevant platform details to demonstrate their connection to the stolen crypto or other digital assets.

A law firm can assist clients by organizing evidence, monitoring government actions, and helping prepare remission or restoration claims when they become available.

While not every instance of cryptocurrency theft leads to reimbursement, meaningful recovery is sometimes possible when the stolen funds intersect with federal investigations or seizure operations.

How a Cryptocurrency Fraud Lawyer Helps Victims

A cryptocurrency law firm provides critical support for people who have lost money to scams, especially as victims often feel overwhelmed by a complex legal landscape they never expected to find themselves in.

Many individuals targeted by crypto fraud lose tens of thousands or even hundreds of thousands of dollars, leaving them unsure where to turn or whether recovery is even possible.

A blockchain lawyer brings a deep understanding of how scams operate, how funds move across the blockchain, and how law enforcement handles cases involving recording transactions on immutable ledgers.

Instead of trying to “reverse” a transfer (which cannot be done), lawyers help victims understand the only legitimate recovery pathway: government seizures of scam-controlled wallets followed by forfeiture and potential victim restitution.

They also help determine whether a victim’s losses align with active investigations or larger criminal operations already under review by federal authorities.

While every case is different, lawyers who represent clients in cryptocurrency fraud matters offer structure, clarity, and a grounded explanation of what may be possible.

For many victims, this guidance is the first step toward rebuilding confidence and deciding how to move forward after a devastating financial loss.

Investigating the Fraud and Identifying Recovery Options

Investigating cryptocurrency fraud begins with understanding how the scam occurred and determining whether the stolen assets can be traced on the immutable ledger online.

Because digital asset values can fluctuate dramatically and some investments are extremely speculative, many victims do not realize they have been defrauded until long after the scammer has disappeared.

Lawyers and investigators analyze transactions, communication logs, platform details, and wallet connections to see whether the stolen funds intersect with broader criminal cases or potential seizure actions.

Although only a small portion of stolen crypto is ever recovered, recovery becomes possible when assets were consolidated into wallets later seized by federal authorities.

Some cases involve security and data breaches, while others target ordinary cryptocurrency users who were misled into sending funds voluntarily under false pretenses.

By mapping out the flow of funds and assessing federal activity, lawyers can help victims determine whether viable recovery pathways exist.

Reviewing Evidence and Transaction Records

Reviewing evidence is one of the most important steps in determining whether recovery may be possible, especially because scammers often move funds quickly across multiple cryptocurrency wallets.

Lawyers examine everything a victim can provide (transaction IDs, wallet addresses, platform screenshots, emails, and chat logs) to reconstruct how the fraud unfolded and where the assets went.

Since digital investments range from simple peer-to-peer transfers to complex cross-chain swaps, every detail matters in identifying potential links to larger scam networks or known illicit wallet clusters.

Accurate transaction records help determine whether the stolen funds passed through exchanges, mixers, or intermediaries that may later cooperate with investigators.

This documentation also becomes critical if the case aligns with a federal seizure, as victims must demonstrate a direct financial loss tied to specific wallets or transfers.

Without these records, it becomes much harder to show law enforcement where the funds originated or how they were stolen.

By organizing and analyzing all available evidence, a lawyer helps victims establish the strongest possible basis for any potential recovery.

Coordinating with Cryptocurrency Exchanges, Agencies, Investigators

When cryptocurrency fraud rises to the level of a federal investigation, recovery becomes possible only through coordinated action between cryptocurrency businesses, exchanges, and government agencies with authority to seize illicit assets.

Exchanges often assist investigators by providing account histories, IP logs, KYC records, and information that helps identify who controlled the wallets involved, even when scammers used cryptographic techniques to obscure transfers.

Once law enforcement establishes that certain wallets are tied to criminal business operations, federal prosecutors can seek warrants to freeze or seize those assets.

These seizures rely heavily on anti-money laundering rules, reporting obligations, and interagency cooperation that allow authorities to track funds and prevent further movement.

Agencies can then consolidate seized assets and prepare them for forfeiture, creating the legal conditions under which victims may later file remission or restoration claims.

The process is complex, and it often involves coordination across borders and jurisdictions, especially when scammers operate overseas or use foreign exchanges.

U.S. regulatory bodies also play a major role in identifying fraudulent conduct, overseeing compliance, and initiating civil enforcement actions when fraud affects investors.

While not every case results in seizure, this coordinated framework is the backbone of legitimate crypto recovery efforts.

Agencies and authorities commonly involved in crypto seizures:

• Financial Crimes Enforcement Network (FinCEN): Oversees anti-money laundering compliance and collects suspicious activity reports from exchanges.
• Commodity Futures Trading Commission (CFTC): Investigates fraud involving digital assets treated as commodities and enforces violations in futures and derivatives markets.
• Internal Revenue Service (IRS-CI): Conducts criminal investigations into tax evasion, illicit income, and laundering connected to digital assets.
• Securities and Exchange Commission (SEC): Pursues civil enforcement related to unregistered securities, fraudulent token offerings, and deceptive investment schemes.
• Federal Bureau of Investigation (FBI): Leads many crypto fraud and pig-butchering investigations, including large seizure operations.
• U.S. Secret Service: Specializes in asset tracing and financial fraud operations involving digital currencies.
• Department of Justice (DOJ): Executes seizure warrants, manages forfeiture proceedings, and administers victim remission and restoration programs.

These agencies work together to identify criminal networks, freeze illicit assets, and create the pathways that may eventually return stolen funds to victims.

Working with state or federal regulators is highly important when securing stolen funds.

Protecting Victims from Secondary Scams and Misconduct

Victims of cryptocurrency fraud are often targeted a second time by scammers who pose as recovery agents, government officials, or cybersecurity specialists offering false promises of guaranteed refunds.

These secondary scams exploit fear, embarrassment, and urgency, convincing victims to pay “processing fees,” share wallet access, or disclose private information that places them at further risk.

A cryptocurrency fraud lawyer helps victims recognize these tactics and avoid engaging with anyone who reaches out unexpectedly or claims to have inside knowledge of their case.

Lawyers reinforce that legitimate recovery efforts never involve paying upfront charges, unlocking fees, or handing over private keys or seed phrases.

They also guide victims on how to verify communication from exchanges, regulators, or law enforcement, reducing the chances of falling for impersonation attempts.

When misconduct occurs (such as threats, harassment, or unauthorized use of a victim’s personal data) legal counsel can advise on reporting, documentation, and escalation.

By creating a structured and safe process for handling communication and evidence, a lawyer helps victims stay protected while pursuing legitimate recovery options.

What To Do If You Suspect Cryptocurrency Fraud

When cryptocurrency investors first sense something is wrong, whether a platform becomes unresponsive or withdrawals suddenly stop, acting quickly is essential.

Early steps can preserve evidence, prevent further losses, and improve the chances that authorities can identify the scam or link it to larger investigations.

Victims should avoid communicating further with the suspected scammer and instead focus on securing accounts and documenting what has occurred.

The goal is to create a clear record that investigators and legal professionals can rely on later.

Steps to take if you suspect cryptocurrency fraud:

1. Secure your accounts: Change passwords, enable multi-factor authentication, and log out of all devices to prevent unauthorized access.
2. Preserve all evidence: Save transaction IDs, wallet addresses, screenshots, messages, and any platform activity to establish a timeline of events.
3. Report the incident promptly: File a report with IC3 or your local police to create an official record that may support future investigations or recovery efforts.
4. Notify exchanges involved: Contact any crypto platforms or financial institutions used in the transaction so they can flag activity and potentially provide key account data.
5. Consult a cryptocurrency fraud lawyer: A lawyer can evaluate your documentation, advise on realistic options, and help determine whether your case aligns with any active investigations.

What NOT to Do After Discovering a Scam

After realizing you’ve been scammed, certain actions can significantly reduce the chances of recovery and increase your exposure to additional fraud.

Many victims panic and react impulsively, which scammers exploit to steal even more money or sensitive information.

Avoiding these mistakes protects your remaining assets and helps maintain the integrity of your evidence.

It also prevents scammers from using psychological pressure to re-engage you or manipulate your fear.

Staying calm and informed is essential to making effective decisions in the aftermath of a cryptocurrency scam.

What NOT to do after discovering a scam:

• Do NOT send more money to anyone claiming you must pay “fees” or “taxes” to unlock your funds.
• Do NOT delete evidence, including messages, screenshots, transaction confirmations, or emails.
• Do NOT share private keys, seed phrases, or full exchange credentials with anyone offering help.
• Do NOT trust unsolicited recovery services, as many are operated by the same scammers or their affiliates.
• Do NOT panic-transfer remaining crypto, which may complicate tracing efforts or expose you to further fraud.

When to Contact a Cryptocurrency Fraud Lawyer

You should contact a cryptocurrency fraud lawyer as soon as you realize your funds may have been stolen or your account compromised.

Early legal guidance can help you preserve crucial evidence and avoid mistakes that might weaken your case.

Because scams often involve international actors, fast-moving transactions, and complex tracing requirements, a lawyer experienced in cryptocurrency practice areas can provide clarity during a stressful and confusing time.

If exchanges, banks, or government agencies become involved, an attorney can communicate on your behalf and ensure your reports and documentation are properly prepared.

Reaching out promptly gives you the best chance of determining whether a legitimate recovery pathway may exist.

TorHoerman Law: Cryptocurrency Fraud Attorneys

Cryptocurrency fraud leaves victims facing sudden financial loss, emotional stress, and uncertainty about what to do next.

TorHoerman Law helps individuals make sense of what happened, organize their evidence, and understand whether their situation aligns with active investigations or potential recovery pathways.

Our team has experience navigating the rapidly evolving world of crypto fraud and the legal systems that govern enforcement, seizures, and restitution.

Whether you lost money through a deceptive platform, a phishing attack, or a large-scale investment scam, we are here to provide guidance grounded in real legal processes, not false promises.

If you or a loved one has been affected by cryptocurrency fraud, contact TorHoerman Law today for a free, confidential consultation.

Our attorneys are available 24/7 to review your case and help you take the first steps toward potential recovery.