Cryptocurrency crime had a record-breaking year in 2021, with the latest reports finding scammers took $14 billion worth of crypto last year. According to blockchain data, that’s almost twice the $7.8 billion taken by scammers in 2020 and we expect the number to keep growing as crypto gains popularity.
Our daily mission at Cyberscope is to protect retail investors and traders from scammers and fraudsters. To achieve that we are providing services like KYC that can protect your investment in the case you become the victim of a crypto scam.
What to check before investing
Before investing your funds in any new project it is important to DYOR (Do Your Own Research). You will hear this acronym a lot in the crypto industry, but it is critical to understand its importance.
"New crypto users should do their own research and trust themselves."
- CZ, Binance CEO
Cyberscope offers the highest quality KYC service.
Always, invest in projects that have been audited & KYC’d by a reputable firm like Cyberscope. This will give you higher chances to recover your funds in case the project owners of the cryptocurrency you invested in, decide to commit some sort of fraud.
How to identify if you have been scammed
No matter how careful you are, there are still possibilities that your hard-earned funds end up in the pockets of scammers. The first thing you ought to do is make sure you’ve actually fallen a victim to a crime.
Here are the first things you need to check before taking action to report a case of fraud:
Are the founders of the project responsive on social media?
Check the project’s Telegram channel or Discord to see what other investors like yourself are saying. It is possible that you missed an announcement or a migration is happening in the contract and trades are paused.
Trace the transactions of the team’s wallets.
Look at how the funds of the projects are being managed by the team. Do the transactions match what the founders are claiming? Do you notice any suspicious patterns?
Look at the project’s roadmap.
Is the project doing active development on the project? Are they continuing their marketing activities?
Once you are certain that you are a victim of a crime, gather all the evidence you can and contact the KYC provider of the project to open an investigation.
How you can recover your funds
So, you spent hours researching a new project and still the unexpected happens and the project you invested in, either rugpulls or the project owners perform some other sort of scam. What can you do now?
The first thing you need to do is to contact the KYC provider of the project. KYC companies like Cyberscope will open a thorough investigation on your behalf and do their best to recover your funds.
Once it has been determined that the project has committed a crime, a respected KYC provider will file charges on your behalf. That shouldn’t stop you to pursue the scammers yourself as well to increase your chances of recovering your funds.
Here are the steps you can take to make this happen:
Request an incident report from your KYC provider.
The incident report will contain information like the owner's wallet and the owner’s personal data, so you can file charges with your local authorities.
Gather a list of all the blockchain transactions involved in the process
This will prove to be valuable evidence for authorities to help them conduct their own research and investigation. If you see the scammer withdrawing their funds to a Centralised Exchange like Binance, immediately contact the exchange with all the information.
File a report with FTC & FCA
There are organisations like the Federal Trade Commission and the Financial Conduct Authority that have dedicated departments to battling cryptocurrency frauds.
Hire a Cryptohunter
If you have lost a substantial amount, you might want to consider hiring an expert to help you out. Cryptohunters work with both cryptocurrency holders and law enforcement agencies to search for and recover misplaced, inaccessible or stolen cryptocurrencies. They use specialized software to generate millions of potential passwords and tend to charge a flat fee.
Recovering your crypto funds if you have been a victim of crime, might be difficult but not impossible. A lot of users have reported successful cases, where they managed to recover a part or the full amount of funds they lost by following these steps. Don’t give up and remember to always DYOR before investing in new projects.