Are Crypto Recovery Services a Scam? How To Be Sure

Are Crypto Recovery Services Legit?

If you’ve been the victim of a scam, you know that you’d do just about anything to recover your lost funds. For one California man, this meant enlisting the help of a “crypto recovery specialist” after being scammed out of Ether currency during an elaborate scheme on YouTube [*]. 

But months later — and after paying the “specialist” the equivalent of more than $20,000 in fees — the victim had to face a hard truth: He’d been scammed yet again.

Cryptocurrencies have become lucrative targets for con artists, hackers, and scammers. Depending on what source you believe, cryptocurrency scams cost victims anywhere from $1 — 14 billion in 2021 alone. 

Unfortunately, scammers aren’t content to just steal your crypto assets. A new breed of fraudulent “crypto recovery services” and “fund recovery agencies” prey on victims by promising to recover their lost assets — but steal even more from victims instead. 

So, how can you spot a crypto recovery scam? And is there any way to legitimately and safely recover lost or stolen digital currency?

In this guide, we’ll explain how these crypto recovery scams work, how to spot the red flags of a scammer, and what to do if you’re the victim of a crypto scam.

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What Are Crypto Recovery Services?

Cryptocurrency recovery services promise to recover crypto funds that have been lost or stolen — for example, Bitcoin, Ethereum, Litecoin, Dogecoin, and other cryptocurrencies.  

But while there are some legitimate recovery services — that can help you with data and password recovery or gaining access to your Bitcoin wallet, for example — the majority of them are scams.

These services are part of the broader category of refund and recovery scammers who claim to investigate and uncover lost or stolen assets. These scammers target people who have already been victimized, offering them false promises to recover their lost goods — for a fee. 

Unfortunately, there are many ways for scammers to make fraudulent services seem legitimate online. For example, they might:

• Have a professional-looking website that appears in Google search results. It is relatively easy to create a website and have it show up on search engine results pages. Look for warning signs like poor grammar and unprofessional or fake-looking logos and graphics.

• Write fake press releases that are picked up by publishers online. Many news outlets publish press releases directly from distribution services. Scammers have begun writing fake press releases that boast of their (fake) successes. Many of these get published unchecked. 
• Create fake testimonials and success stories on their websites or on social media. Most scammers post fake testimonials and success stories with the goal of convincing people that their service is legitimate. Scammers can even post these fake reviews on bona fide third-party websites like Trustpilot.

Generally speaking, the only legitimate crypto recovery services are those that help you recover cryptocurrency that you own, like recovering private keys from damaged hard drives. 

Any “recovery service” that claims to use hacking methods, or charges an upfront fee, is a scam.

How Crypto Recovery Service Scams Work

Crypto recovery service scams involve criminals promising to recover lost cryptocurrency when it’s impossible to do so. They often take the form of advance-fee scams which charge upfront fees for services that are never rendered. 

Here’s how crypto recovery scams generally work:

1. The scammer targets people who have already fallen for a scam by contacting them directly or via ads on websites or social media. These recovery companies often describe themselves using terms like “recovery specialists,” “cryptocurrency bounty hunters,” or “wallet recovery services.” 
2. Scam victims see advertisements in search results or read accounts of successful recoveries on Reddit or Twitter and contact the scam organization to recover their cryptocurrency.
3. The service then charges an upfront fee, often hundreds or thousands of dollars. Following this, the scammer continues to charge additional fees for several weeks until the victim realizes that it’s a scam.
4. Alternatively, the service might claim to charge a percentage of the returned funds if successful. But instead, they will try to steal personal information or gain access to the victim’s cryptocurrency wallet by claiming they need their seed words as part of the recovery process. This information can then be used to steal the victim’s identity, commit additional scams, or steal more crypto through financial fraud.

How To Tell if a Crypto Recovery Service Is Legitimate: 6 Warning Signs

Almost all crypto recovery services are scams — especially those that promise to return crypto that you don’t own anymore. If you see any of these warning signs, there’s a very good chance that you’re dealing with a scammer: 

1. They ask for an upfront fee before you receive any help. This is the hallmark of an advance payment scam and a good sign that you’re dealing with a fraudster. Some scammers will ask for a seemingly small deposit upfront but will increase the frequency and size of payment requests over time. 
2. They claim to have “special access” to crypto exchanges. A crypto exchange is a digital marketplace where you can trade cryptocurrencies. Scammers often claim to have backdoor access to an exchange via “connections” or some hacking capability that will enable them to track down whoever scammed you and return your money. This is all a lie.
3. They ask for your passphrase or other sensitive information. If someone asks for this kind of information, it means that they are trying to steal your identity or gain access to your accounts.
4. They ask for your bank account or crypto wallet password and details in order to deposit your “recovered” crypto. As above, a scammer will ask for access to your bank or crypto wallet in an effort to steal more funds from you. 
5. They don’t list a physical address, or the company is located outside of the United States. Scam companies often don’t list a business address. If they do, it’s usually outside of the United States, isn’t a real address, or doesn’t look like a real place of business. In these cases, it’s safe to assume that it’s a fraudulent business.
6. They don’t have a phone number, only communicate via messaging platforms, or have an unprofessional email address. A legitimate business person will be happy to discuss their services over the phone and are unlikely to conduct business via apps like Telegram or WhatsApp. These apps are generally used by scammers to maintain anonymity and avoid the chance of being caught by law enforcement agencies. 

Keep Your Crypto Safe: Watch Out for These 5 Crypto Recovery Scams

1. “Success stories” from clients on Reddit and social media
2. Fake emails and forged receipts showing “recovered” crypto
3. Ethical hackers offering to get your crypto back
4. Crypto recovery services asking for an upfront fee
5. Recovery “gurus,” lawyers, or law enforcement on social media

Crypto recovery scams are constantly evolving. If you see any of the following claims, you’re dealing with a scam. 

1. “Success stories” from clients on Reddit and social media

Crypto recovery scammers often create fake Reddit accounts (or use hacked accounts) to describe invented “success stories” promoting their own services. They offer sob stories claiming that they lost their life savings but were saved by a recovery service [*].

Warning signs:

• Scammers often refer to “experts” on Instagram, WhatsApp, Telegram, and similar messaging apps. This is an immediate red flag — real professionals are far more likely to use a combination of emails and direct calls to conduct business. 
• The accounts used to post the “success stories” are brand new, have very few posts, or show signs of being stolen from a previous user.
• The “success stories” all follow the same template with very few details about charges incurred or methods used to recover the crypto. They use emotional language to target distraught people who are desperate to recover their lost investments. 

⛳️ Related: The Latest Instagram Scams You Need To Watch Out For →

2. Fake emails and forged receipts showing “recovered” crypto

If contact is made with a crypto recovery scammer, they’ll likely send fake emails designed to convince you that they really have found your lost crypto and that it’s on the way — as soon as you pay. 

For example, they might send a picture of a crypto wallet (likely photoshopped or ripped from the internet) that shows your purported balance. They will then charge you for the delivery of the funds, which will never occur. 

Warning signs:

• Scammers often use free email service providers (such as Gmail or Yahoo!). 
• Scammers may use stock photography, fake names, and false credentials, which can be double-checked with a simple Google search in many cases. 

3. “Ethical Hackers” offering to get your crypto back

“Ethical hackers” offer to hack the original scammers and steal back your cryptocurrency in return for a fee or percentage of the returned funds. However, it’s usually impossible to find a real-world identity from information available via cryptocurrency transfers. 

Even if it were possible to discover the original scammer’s identity, it’s highly unlikely that a Robin Hood figure would hack and return your crypto out of goodwill. If they have the ability to hack and steal other people’s crypto, they would most likely steal yours. 

Warning signs:

• Any claim to be able to hack back your crypto, reverse a transaction, or brute-force a private key should be an immediate red flag. There is no way to reverse a transaction once it is confirmed on the blockchain. Likewise, it’s next to impossible to discover the identities of scammers in order to target them. 
• Often, scammers won’t ask you key questions about whether it’s possible to recover your crypto. Instead, they will lather you with promises while making suspicious requests for information or payment.

⛳️ Related: The 15 Types of Hackers (And What They’re After) →

4. Crypto recovery services asking for an upfront fee (or personal information) 

This is the most common type of digital asset recovery scam and involves the scammer asking for a (normally quite large) upfront fee before returning the recovered crypto. In almost all cases, the scammers will ask for additional fees as time goes by, citing several excuses for not returning the crypto.

Warning signs:

• Advance payment scammers often submit odd demands like upfront fees, “donations,” and requests for payment or your personal information. 
• The scammers provide reasons why the fees can’t be paid after the money is recovered. 
• Scammers often ask for payment in cryptocurrency (especially smaller, lesser-known currencies) to ensure that the transfers are untraceable. 

5. Recovery “gurus,” lawyers, or law enforcement on social media

In these scams, criminals pretend to be so-called experts like lawyers, investigators, or law enforcement officers and promise to recover stolen funds for you [*].

They make exaggerated claims about their successes and try to convince you that they will be able to perform miracles. You should block these users immediately to prevent falling victim to a scam.

Warning signs:

• This type of scammer sends unsolicited messages offering their “services.” They usually have discovered your name via a social media post or public scam report — and contact you already knowing that you are a potential victim. Real businesses are highly unlikely to send unsolicited messages, especially via social media platforms. 
• These scammers often pressure you into using their services by claiming that if you don’t act fast, you could lose the crypto for good. In reality, the crypto is already lost, so it’s better to cut your losses than fall victim to a second scam. 

Remember: Legitimate government agencies that investigate fraud will never ask you for money and will contact you via a government email address — not through social media. 

Can You Get Your Money or Crypto Back From a Recovery Scam?

The unfortunate reality is that it’s all but impossible to recover stolen cryptocurrency. Only in specific cases of hardware damage or partial key loss is cryptocurrency potentially recoverable (for example, if it’s partly lost or inaccessible in an old storage device). 

If you’ve lost cryptocurrency in a transaction by sending it to an account that you have no control over, there is very little you can do to recover the funds. 

Is There a Safer Way To Try and Get Stolen Crypto Back? 

If you’re the victim of a cryptocurrency scam, it’s unlikely that you’ll ever see your crypto again. However, there are steps you can take to improve your cybersecurity, prevent future scams, and maybe recover your lost crypto.

Report the scam to your crypto exchange

By providing your exchange with important details about the scam, they may be able to identify the scammers and prevent them from perpetrating future scams. 

In rare cases, they may be able to freeze the perpetrator’s account and potentially return the stolen crypto. 

Include as many details about the scammers as you have, such as how and when the scam took place and any transaction identification (TXID) codes. The TXID hash provides critical information about the time, receiving address, amounts, and more. 

Report the scam to the relevant authorities

Reporting scams to government agencies helps catch scammers and prevent future fraud from happening. These agencies might also be able to help you protect or recover your assets. 

You can report scams to:

• The Federal Trade Commission (FTC) 
• The Commodity Futures Trading Commission (CFTC) 
• The U.S. Securities and Exchange Commission (SEC)
• The FBI’s Internet Crime Complaint Center (IC3) 

Monitor and protect your assets

It’s vital to ensure that no important information was conveyed to the scammers. If it was, they might be able to steal your identity or access more of your assets, including your bank account or crypto wallet. 

• Secure your accounts by using unique, strong passwords, and pay attention to data breaches. 
• Use two-factor (2FA) or multi-factor authentication (MFA) on all of your accounts. Whenever possible, use an authenticator app (such as Authy) instead of SMS for your 2FA codes.
• Keep your keys private. No one needs to know these.  
• Remain skeptical, and stay up to date regarding current scam methods. 
• Ignore all requests, promises, and threats that you receive via text messages and emails; and always contact companies or government agencies directly via their official contact information.
• Never send another individual your personal or payment information over the internet.

Are your passwords or other sensitive information on the Dark Web? 

Hackers leak stolen data onto the Dark Web that can be used to steal your identity and money. Check if your accounts have been compromised by using Aura’s free Dark Web scanner.

The Bottom Line: Protect Your Crypto From Scammers

When it comes to cryptocurrency, your best bet is to be proactive. Keep an eye out for the common red flags, and never provide payment before receiving a service. For added protection against identity theft and fraud, consider signing up for Aura.

With Aura, you get:

• Proactive digital security — including antivirus software, a virtual private network (VPN), password manager, and protection against phishing, malware, spyware, and ransomware. 
• Top-rated identity theft protection that warns you if your online accounts, Social Security number (SSN), driver’s license, or other sensitive information have been compromised.
• Credit monitoring that alerts you in near real-time about changes in your credit score or suspicious transactions on your bank and credit card accounts.
• 24/7 U.S.-based fraud resolution specialists who are available to help you via phone and email. 
• $1,000,000 insurance coverage for eligible losses due to identity theft. 

Keep your assets and identity safe. Try Aura free for 14 days →