If you’ve been the victim of a crypto scam, your first thought is probably: “What do I do now?” Accepting that you may have been scammed by a fraudulent crypto platform is the first difficult step in your journey toward possible resolution.
In this guide, we’ll cover a range of scenarios that may be applicable to your situation. We’ll also outline some potential actions you can take if you suspect you are the victim of a crypto scam, and go over some helpful tips for safeguarding yourself against crypto scams in the future.
Note: The information in this article does not constitute legal advice and is for informational purposes only.
Tips on what to do if you’ve been scammed by a forex broker or trader
I’ve been studying and writing about the digital assets for over eight years. In that time, I’ve seen a wide variety of cryptocurrency scams and spoken with countless victims. Here are my top 5 tips for what to do if you’ve been scammed by an illegitimate crypto broker or a fraudulent crypto platform:
1. Avoid sending more money.
This is the big one. Operators of crypto scams will do their best to manipulate you, and will often continue to do so even after you’ve already lost money to their scam. If you have any reason to suspect that you’ve been scammed out of your money, remember to stay calm, cut off their flow of money, and start looking into crypto recovery options.
2. Gather as much information as possible.
If you suspect that you’ve been scammed, you’ll need to gather as much detailed information as you can about the platform, any individuals you’ve been in contact with, and the specifics of the suspected scam.
Start writing down this information right away:
- Website(s), platform(s), documentation, and any provided terms and conditions.
- Documented exchanges – email, text, messages, etc. You’ll want to note the names of any representatives you communicated with, as well as all email addresses and phone numbers.
- The scam’s purported address and country of operation.
3. Hire professionals.
Depending on the amount of money you have invested, it may be worth hiring legal counsel such as a private investigator or securities attorney. In many cases, however, this strategy may not be cost-effective. If the crypto scam is operating from another country, for example, hiring legal counsel and chasing them down will likely prove to be expensive.
4. Identify the type of crypto scam.
There are a handful of common crypto scams, and it’s important to identify how you’ve been scammed. Was it an unregulated crypto broker? Or maybe it was a clone firm that created a fraudulent website imitating a real broker? Were you conned by a social media influencer or impersonator?
5. Report the scam to the relevant authorities.
If you have exhausted all the options listed above, contacting the appropriate authorities may be your next step – though they may not always be able to assist you. For example, if you are located in the U.K. but you suspect you were scammed by crypto platform located in a different country, it is unlikely that the police or financial markets regulator in the U.K. will be able to assist you. Nonetheless, it is important to provide the authorities with all the information you’ve gathered to increase the chances of a more fruitful investigation.
How to file a complaint and/or report a crypto scam
In the event that you cannot resolve your complaint or grievance with your broker directly, you can file a complaint with your local regulator. Below, you can find helpful links and resources for filing complaints with Tier-1 regulatory jurisdictions (learn more about regulation and see the different Tiers of forex regulators by checking out the Trust Score page):
- Australia: Follow this link to file a complaint with the Australian Regulators
- Canada: Follow this link to file a complaint with the Canadian Regulatory Organization
- Hong Kong: Follow this link to file a complaint with the Securities Commission
- Europe: Follow this link to file a complaint with the European Securities and Markets Authority
- Japan: Follow this link to file a complaint with the Japanese Financial Services Authority
- Singapore: Follow this link to file a complaint with the Authority in Singapore
- New Zealand: Follow this link to file a complaint with the Financial Markets Authority
- Switzerland: Follow this link to file a complaint with the Swiss Financial Authority
- United Kingdom (U.K.): Follow this link to file a complaint with the Financial Authority
- United States (U.S.): Follow this link to file a complaint with the Commodity Trading Commission
If you are a U.S. resident and you believe you’ve been scammed by a U.S.-based scam forex broker, you can contact Broker Complaint Alert (BCA), as wire fraud is a federal offense (among other types of internet crimes). You can also seek legal counsel, file a complaint with BCA for crypto-related scams, and file a securities fraud complaint with the SEC.
In some cases, the Recovery Asset Team (RAT) from IC3 can assist with tracking and freezing funds that scammers steal from consumers, as can be seen in the below infographic from the IC3’s annual report.
Can I get my money back if I’ve been scammed?
Though it is technically possible, it is exceedingly rare for traders to recover funds once they’ve been scammed by a fraudulent crypto scheme. If you are the victim of a crypto scam, recovery will depend on a number of factors unique to your situation (such as your location and your country’s regulatory body) and the circumstances of the potential scam broker (such as the alleged scammer’s location and any applicable laws and regulations). In all cases, you should try to explore all available options for retrieving your money before pursuing potentially costly legal action.
How do I come back from being scammed?
After getting scammed financially by a fraudulent scam broker or bogus investment, it may take time for you to recover – financially, mentally, and emotionally. Should you decide to start trading/investing crypto again, it is crucial to take things slow, do plenty of research, and be sure to only use trusted financial institutions that are well-established and highly regulated.
Whether you have been scammed, or you are just getting started on your crypto trading journey, here are some important questions to ask about the broker or financial institution when considering their services:
- Where is the company headquartered?
- What is the company’s official website? Can the website be verified?
- How long has the company been in operation?
- How many international entities are associated with the brand, and which entity will I be dealing with? Is there an associated parent holding company?
- Is the entity that will be holding my account properly licensed? If so, which competent authority (or authorities) have licensed the firm?
- Am I being contacted directly by a representative that uses an email address with an official company domain?
Work With Trusted Digital Currency Exchange Commission
The best way to avoid crypto scams is to use brokers that are highly regulated and licensed in multiple international jurisdictions. If you are scammed by – or find yourself in a dispute with – a broker that lacks proper regulation, you often have no recourse for recovering your funds.
We’ve tested over 60 of the top international brokers and conducted thorough research into each broker’s range of regulatory licenses to help you pick the most trusted crypto brokers in the industry. For more information, visit – aberdeendycelp.com.
