If you are a victim of a Bitcoin or other cryptocurrency scam, the chance of recovering your funds seems pretty much nonexistent. Due to the anonymous and irreversible nature of blockchain transactions, the likelihood of recovering your funds is fairly low.
However, all hope is not lost. Depending on your situation and your level of persistence, there may be a few ways to recover your lost assets. Below are 4 ways to possibly recover your lost coins, all with varying degrees of real-life success.
Call Your Bank
If you have fallen victim to a scam that resulted in direct charges on your credit/debit card or transfers from your bank account (such as making deposits to purchase tokens, but not receiving tokens back, or depositing fiat currency into a mining/Ponzi scam), call your bank IMMEDIATELY and report it as an unauthorized/fraudulent transaction.
The sooner you report, the higher the chance the charge may be reversed. Most financial institutions give you 1-3 months after the charge has been made to report unauthorized transactions.
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Report To The Police
This is something we encourage you to do in all circumstances. Authorities need tips and reports to build up cases against criminals. Subsequent arrests of such criminals may or may not result in the recovery of your funds, but it will certainly prevent others from falling victim to the same scam.
The likelihood of an arrest will be significantly higher if you have any identifiable traits about your scammer. For example, in July 2017, one Chinese Bitcoin investor woke up to find 188 BTC was withdrawn from his wallet and reported the case to the police. The police were able to track down the suspected scammer using information from his report (the investor met the scammer through WeChat). The arrest led to the freeze of the scammer’s bank account, and the recovery of the victim’s funds.
Hire A Bounty Hunter
If you are willing to pay out a decent amount of money in exchange for the return of your funds, there are few websites where you can post a bounty with the hope that someone who is knowledgeable in blockchain can help you to recover the funds.
For the bounty, you can set a fixed coin price or a percentage of your returned funds. Since the bounty will not be paid out until the return of the funds, it is a rather low-risk attempt.
Below are few channels where you can post bounties:
Follow The Money.
You can (and should) follow the transactions of the wallet address that your funds were scammed into. If you notice the scammer attempt to transfer funds from the wallet to cryptocurrency exchanges to sell for fiat currency, report to the relevant exchanges immediately.
Note that the only way for a scammer to cash out is to turn the cryptocurrency into fiat currency. Scammers often attempt to do this as soon as possible, unless the amount is so large that they need time to wait out the storm to launder the coins.
So, an opportunity to catch the scammer is to follow the money trail through blockchain explorers and trace your lost fund. Check out our crypto resource page if you need blockchain explorer recommendations.
In order to trade crypto to fiat on most popular exchanges, one would need to submit KYC (Know Your Customer) information, such as names, addresses, and ID information.
Contacting the exchanges can potentially help you to track down the scammer’s identity, which can help to lead to his/her arrest. This is another reason why it is important for you to file a police report as soon as the incident has taken place.
Remember the massive heist of Mt Gox in 2014 that shook the entire Bitcoin universe? The resulted loss from the hack was over 850,000 BTC, worth $65 million at the time.
Some creditors and blockchain analysts never took their eyes off the suspected wallet addresses the hacked funds went into. This past July, more than 3 years after the initial incident, the police arrested the leader of BTC-e exchange in connection with money laundering activities connected to the infamous Mt Gox hack.
Though a single arrest itself may not necessarily lead to the recovery of the funds, it is certainly a step in that direction. When the loss involved is that big, few years are worth the wait!