It can feel like a lifeline: someone reaches out promising to reclaim money lost in an earlier investment or fraud. The pitch looks polished, the outfit seems legitimate, and the refund sounds like overdue justice. A common recovery con preys on this hope, especially among people who dealt with cryptocurrency losses.
Here’s the catch: they demand an up-front payment for supposed “recovery services,” which are typically fraudulent. Beyond your original loss, you could end up sending more cash or crypto to professional criminals.
This setup is classic advance-fee fraud—pay first for a product or service they never intend to deliver. When you’re eager to restore savings or crypto assets, the lure intensifies. Engaging with these operators usually compounds the damage.
Read on for practical guidance to spot and avoid bogus recovery offers.
Spotting a Recovery Ruse
These schemes come in many flavors, but they tend to follow the same playbook.
Most “recovery” pitches follow a predictable script: they claim your funds are already found, then invent urgent fees and paperwork to keep you paying.
Fraudsters acquire targets by buying or trading lists of people previously hit by scams. At times, they’re linked to the original con, returning to squeeze even more money.
You may receive urgent emails, texts, or calls from official-sounding groups claiming ties to the United States government, regulators, law firms, or consumer advocates. High-pressure scripts, countdowns, and sweeping guarantees are red flags.
Impersonation is common. Scammers pose as registered securities professionals or reputable brokerage firms and may misuse the name of a real person or a firm registered with the Financial Industry Regulatory Authority (Finra). Some even urge you to “verify” them through public databases to create a veneer of legitimacy.
Other red flags show up in how they ask to get paid and what they demand from you. For example, they may say your money is “frozen” until you pay a “tax,” “insurance,” “bond,” or “processing” fee; they may request a small “test transaction” in Bitcoin or Ethereum that turns into repeated demands; or they may insist you install remote-access software so they can “help” you complete steps (and then drain accounts). Any request for your seed phrase, private keys, or full wallet access is a tell—no legitimate helper needs that information.
Others launch slick websites touting themselves as asset recovery specialists, then seed fake press items and deceptive social ads bragging about returning stolen crypto and other funds.
Once you engage, the message flips to “good news”—your money is “located” and can be released for a fee. After you pay, new fees appear, but the promised refund never arrives.
Protect Yourself: Steps to Avoid a Second Scam
If you discover you’ve been scammed, act quickly and methodically. Stop sending money immediately, cut off contact, and secure what you still control: change passwords, enable two-factor authentication, and move remaining assets to a new wallet you create yourself if you suspect your current wallet or device is compromised. If you connected a wallet to a suspicious site, revoke any token approvals and keep a record of what you changed.
Preserve evidence before it disappears. Save transaction IDs, wallet addresses, screenshots of chats and emails, website URLs, social profiles, receipts, and any “case numbers” or documents they provided. If a bank card, wire, or payment app was involved, contact your financial institution right away to ask about reversals or disputes and to flag the transactions as fraud.
As for getting money back, recovery is often difficult and sometimes unlikely—especially when funds were sent on-chain and quickly moved, swapped, or laundered. Your chances improve when you act fast, the stolen assets can be traced to a centralized exchange or payment service that can freeze funds, and you can provide clear evidence tying the transactions to fraud. Amount, jurisdiction, quality of records, and whether the scammer used mixers or cross-chain hops also affect the possibility of recovery.
It can be possible to recover stolen crypto, but there are real technical and legal hurdles. Blockchain transactions are typically irreversible, scammers hide behind pseudonymous addresses, and tracing may require specialized analysis plus legal orders served across multiple companies and countries. Typical outcomes range from no recovery, to partial recovery, to restitution that arrives much later through enforcement actions—when perpetrators are identified and assets can be seized.
Legitimate recovery channels usually do not look like an unsolicited “recovery service.” They more often involve working with your exchange or wallet provider’s official support, filing reports with regulators or law enforcement, and—depending on the situation—consulting a qualified attorney for civil options. A credible helper won’t guarantee results, won’t ask for your seed phrase or private keys, and won’t demand payment in crypto to “unlock” funds that are supposedly already secured.
If someone contacts you claiming they can recover lost funds, use these safeguards to prevent additional losses:
| Reporting Agency | Type of Scam to Report | How to File |
|---|---|---|
| Financial Industry Regulatory Authority (Finra) Investor Complaint Center | Brokerage- or investment-related fraud; impersonation of brokers or firms | Submit an investor complaint through the official complaint portal with supporting documents |
| Securities and Exchange Commission | Securities fraud; fake investment platforms; misleading offers claiming regulatory affiliation | File a tip or complaint through the agency’s online submission process and attach evidence |
| Your State Securities Regulator | State-level investment fraud; unregistered solicitations targeting local residents | File a complaint via your state regulator’s complaint process and provide transaction records |
| Federal Trade Commission | Consumer fraud and impersonation schemes, including bogus “recovery” services | Report through the agency’s fraud reporting system and include the scammer’s contact details |
| Federal Bureau of Investigation Internet Crime Complaint Center | Online-enabled fraud, including cryptocurrency theft and recovery-fee fraud | Submit an internet crime complaint and include wallet addresses, transaction IDs, and timelines |
- 1. Stay Skeptical.Treat any unsolicited recovery offer with extreme caution, even if it appears to come from a regulator, law firm, or brokerage. Building false credibility is a core tactic designed to end with you paying the scammer. Anyone demanding an up-front fee, guaranteeing success, or urging you not to report the loss to law enforcement is almost certainly a scammer.
- 2. Recognize Common Plays.Learn the influence techniques fraudsters use. Scrutinize messages for warning signs such as odd phrasing, sloppy misspellings, or copy‑and‑paste text, and be wary if they push conversation to personal email, text, WhatsApp, WeChat, or Telegram. Don’t let stress from prior losses or eagerness for a refund cloud judgment or expose personal information.
- 3. Research Before You Engage.Search the names of the organization and individuals, along with the type of offer. Add terms like “fraud” or “scam” to your search. You may uncover red flags or see that consumer protection, regulatory, or law enforcement agencies have warned about similar recovery pitches.
- 4. Never Send Money or Sensitive Data First.Fraudsters push for wires or cryptocurrency because transactions are fast and hard to reverse. Requests for Bitcoin or Ethereum deserve extreme caution. They may also ask for bank details “to deposit funds” or other data needed to “process payment.” Do not transfer money or share personal information until you independently verify who you are dealing with.
- 5. Know Where to Report.If you suspect fraud tied to an investment loss or a recovery pitch, file a complaint yourself through official channels and keep copies of what you submit. Be skeptical of anyone offering to “file reports” on your behalf for a fee.
- 6. Use Legitimate Paths to Seek Redress.All investments carry risk, including the possibility of losing value. If you believe you were treated unfairly, the courts and appropriate regulators provide legitimate mechanisms that may help you recover assets or obtain compensation. Timelines vary widely: exchange or payment disputes may move in weeks, while investigations and legal proceedings can take months or longer depending on cooperation, jurisdiction, and how quickly funds moved.
