Catalog of Scams: The Crypto Cop Scam – A New Cryptocurrency Fraud Preying on Vulnerable Victims

Scammers are always evolving their tactics, and the latest scheme involves a new and alarming twist: posing as “cryptocurrency cops” or fraud investigators who claim they can recover stolen cryptocurrency. This scam preys on individuals who have already been victimized by cryptocurrency scams, such as pig butchering schemes, romance scams, or other online frauds involving digital assets. Here’s how this new scam works and how to protect yourself.

How the Cryptocurrency Cop Scam Works

1. Initial Contact The scam typically begins with a phone call, email, or social media message from someone claiming to be an investigator, law enforcement officer, or “cryptocurrency recovery expert.” These fraudsters often use official-sounding titles like “Cryptocurrency Recovery Specialist” or “Digital Asset Fraud Investigator.”
2. Feigned Knowledge To establish credibility, the scammers provide details about the victim’s original cryptocurrency scam. They may reference amounts lost, wallet addresses, or transaction IDs. Often, this information has been gathered from data breaches, forums, or by monitoring public blockchain transactions related to known scams.
3. Promise of Recovery The scammers offer their services to “recover” the lost cryptocurrency, claiming to have special tools, insider knowledge, or connections to cryptocurrency exchanges and law enforcement. They emphasize their expertise and assure victims that recovery is almost guaranteed.
4. Advance Fee Request Victims are then asked to pay an upfront fee, often framed as a “processing charge,” “administrative fee,” or “legal cost.” This fee may range from a few hundred to thousands of dollars, depending on the supposed complexity of the recovery.
5. The Secondary Scam After the initial fee is paid, the scammers may string victims along, asking for additional payments to cover unexpected costs, taxes, or “blockchain network fees.” In some cases, they even claim that recovered funds have been “frozen” and require further payments to be released.
6. Disappearance Once the scammers have extracted as much money as possible, they disappear, leaving victims even more devastated and financially drained.

Why this Scam is Effective

Vulnerability of Victims Victims of cryptocurrency scams are often desperate to recover their funds and regain a sense of justice. Scammers exploit this emotional vulnerability, offering false hope.

Credibility of Posing as Authorities By claiming to be law enforcement or recovery specialists, scammers gain the victim’s trust. They may use official-looking logos, fake badges, or documents to enhance their credibility.

Lack of Knowledge Many victims are not familiar with how cryptocurrency recovery works or the limitations of law enforcement in tracking stolen digital assets. This knowledge gap makes them more susceptible to believing the scammers’ claims.

Warning Signs of the Cryptocurrency Cop Scam

Unsolicited Contact: Legitimate law enforcement or recovery specialists will not reach out to victims unsolicited, especially via phone, email, or social media.

Upfront Fees: Requests for payment before any recovery work begins are a red flag. Genuine services typically deduct fees from the recovered amount or work on a contingency basis.

Guarantees of Recovery: No one can guarantee the recovery of stolen cryptocurrency. Scammers often make unrealistic promises to lure victims.

Pressure Tactics: Scammers create urgency, claiming that the offer is time-sensitive or that delays could result in losing the chance to recover funds.

Fake Credentials: Be wary of impressive-sounding titles, fake websites, or counterfeit documents that are designed to look official but have no verifiable basis.

How to Protect Yourself

Verify Claims

• • Research any organization or individual claiming to be a cryptocurrency recovery specialist. Look for verified contact information and reviews from trusted sources.
  • Contact local law enforcement or financial regulatory bodies to confirm the legitimacy of the recovery effort.

Avoid Upfront Payments

• • Never pay upfront fees to anyone claiming they can recover lost cryptocurrency. Legitimate recovery services typically do not require such payments.

Consult Professionals

• • Remember that only law enforcement and the courts can typically recover your lost cryptocurrency.
  • If you are considering recovery options, consult with licensed attorneys, financial advisors, or cryptocurrency security experts.

Report Suspicious Activity

• • Report suspected scams to local law enforcement, financial regulators, or platforms like the Federal Trade Commission (FTC) in the United States or Action Fraud in the United Kingdom.

Be VERY Skeptical of Guarantees

• • Remember, cryptocurrency transactions are sometimes irreversible, and recovery is rarely guaranteed. Be cautious of anyone claiming otherwise.
  • Law enforcement is your best bet for seizure and recovery.

What to Do If You’ve Been Contacted

Do Not Engage: Avoid providing personal information or money. Scammers often use information from conversations to tailor their tactics further.

Document and Report: Save emails, messages, or other communications from the scammers. These can be helpful for investigations.

Seek Support: Reach out to a trusted support group or counseling service to address the emotional toll of being victimized by scams.

Review

The ‘Crypto Cop’ scam is yet another cruel ploy that compounds the pain of victims who have already suffered financial losses. By understanding how this scam operates and staying vigilant against its tactics, you can protect yourself and others from falling prey to this new wave of fraud. Awareness, education, and reporting are critical tools in the fight against these increasingly sophisticated scams.

Learn where to report at reporting.AgainstScams.org