When a person goes missing, the first 72-hours are mission critical.
The same urgency applies if you have been hacked, scammed or are the victim of a theft- even more so if the loss are crypto assets. Quick and decisive action in the immediate hours will significantly mitigate the risk of those assets being obfuscated and dissipated and assist with recovery.
Crypto scammers are particularly ruthless, often deploying all manner of sophisticated tactics. From straightforward account compromises and theft with no direct interaction, to elaborate social engineering, often gaining trust through dating websites, fake investment platforms, or social media, their ultimate aim is to deprive a rightful owner of crypto assets.
Discovering that you have been the victim, regardless of the methodology used, can be emotionally draining as well as financially devastating. Clarity of thought and rational action can often give way to absentmindedness. This can lead to victims continuing to pay the bad actors, or fake recovery firms who are one and the same.
In the circumstances this is entirely understandable.
The appropriate next steps can vary depending on the specific circumstances, however our recommended action plan is detailed below and applies to most scenarios:
- Secure your communications
Often, particularly in cases where victims have been socially engineered, your email addresses and social media accounts will likely have been compromised as the result of the hack.
Most mainstream email providers will allow you to see a log-in history which details the IP address and location of all log-in attempts. Consider if any are unrecognisable.
If there are any suspicious log-ins, it is likely that your email address has been compromised and your communications may be monitored by the scammers. This could also impact other personal and financial accounts linked to your email, such as online shopping accounts, bank accounts and social media profiles. Credit ratings and access to future baking facilities may also be affected.
In this case, it is vital that you immediately change the password for your email, and then for all other accounts held online.
In addition, we recommend that you set up a new, secure email address immediately and avoid logging into any accounts you suspect may have compromised. You should divert any personal and critical emails to your new account, and ensure that you update your email address across your online shopping, social media and bank accounts.
It is important that you notify your bank and or cryptocurrency exchange of your new email address, which replaces the old one, and ensure to communicate that no instructions are to be taken from the old email address.
- Cease communications strategically
In cases where scammers have maintained prolonged contact, they may continue to reach out to you. Let them remain unaware you know this is a fraudulent scheme. If they know that you are aware, there is a heightened risk that they will take steps to obfuscate their trail and dissipate assets, which can make asset recovery more complicated.
If you can, you should look to cease communication strategically without encouraging further interaction. One approach might be to indicate you will be unavailable or away for a few weeks. This will hopefully give you and your legal team time to investigate and trace the assets, write to any centralised exchanges who may be in receipt of those assets, and put them on notice of the theft and request that they freeze those accounts pending further legal action.
In short, the longer the scammers believe that their scam is undetected, the better.
You should then immediately begin collating a detailed record of all previous communications, including requests for payments, emails, phone calls, text messages, social media interactions, transaction details, wallet addresses and transaction hashes etc. Accurate records are crucial for any subsequent legal action and investigations. If you have been directed to a webpage during your interactions with the scammers, you should ensure to take screenshots of these pages in case they disappear.
Evidence of what jurisdiction they may be in is also vital. For example, note of their telephone number and dialling code (e.g. +44 for UK) or mention of a registered office (even if untrue) will help dramatically.
- Report to law enforcement
As soon as possible, you should report the theft to the police and Action Fraud – or equivalent law enforcement agencies. Make sure you keep a copy of your report, as well as any crime reference numbers provided.
It is important that you engage with your local police force as much as possible, and obtain a direct liaison and contact details. Action Fraud is only a database, and your query will not progress unless the police investigate.
Try not be discouraged or frustrated if the police cannot offer much help. Police resources, expertise, and capacity to deal with crypto related crimes can vary considerably, and officers may lack immediate familiarity with blockchain technology, or the complexities involved
Even if the police are unable to offer much direct assistance, formally reporting the incident is a crucial step as it creates an official record that supports any subsequent legal and recovery actions you may take with the support of your legal team.
- Device management and evidence preservation
Given that so much of our lives are conducted online and contained within personal devices such as laptops and mobile phones, it is crucial to exercise heightened caution if these devices may have been compromised.
If you notice unusual behaviour or unexpected activity on your devices (for example, unprompted command prompt windows opening up for split seconds, or excessive system resources being used when your device does not appear to be doing much) then this may be an indication your device may be compromised.
This is more likely if the scammers have previously taken remote control of your device under the pretence of assisting you through services, like AnyDesk.
As tempting as it may be, avoid formatting or performing factory resets at this stage. Evidence preservation is vital, particularly as forensic digital examination of your devices could yield critical information, instrumental in tracing and recovering the stolen assets. Formatting or resetting the device risks destroying potentially valuable evidence which often indicates the attack vectors used by the scammers and can be a useful part of the puzzle in identifying who they may be.
If your budget permits, obtaining new, uncompromised devices for interim use is recommended.
- Secure remaining crypto assets
It may be that the scammers have only targeted or been able to target specific parts of your crypto holdings. However, if your devices or email/social media accounts have been compromised, it is likely they know much more than you think – including what centralised exchange accounts and wallet addresses you have that they may wish to target next.
As such, you should immediately access and review all centralised exchange accounts you may hold online, and cold storage where applicable. Update your details held at these accounts, including email, contact information and passwords.
It is also crucial to strengthen your two-factor authentication and carefully review transactions to identify any activity you do not recognise which may be indicative of that account being compromised.
If you are holding any assets on these accounts, consider creating new, secure self custodial wallets on uncompromised devices and transferring remaining assets between multiple wallets.
If you have previously staked assets, check to see whether these remain staked or have been unstaked without your knowledge and are in any cooldown period. If unstaking has been initiated, try to take steps to ensure the unstaked assets can immediately be sent to your new, secure wallets as soon as possible.
- Engage with experts
Engaging promptly with specialist lawyers experienced in crypto asset disputes, particularly asset tracing on blockchains and recovery, can be vital ensuring the swift tracing and recovery of your assets.
Your legal team will quickly be able to identify suitable independent blockchain tracing specialists who will be tasked with conducting an initial tracing report to follow the movement of your crypto assets and their traceable proceeds. You will need to provide proof that you owned the assets (such as statements) as well as relevant transaction hashes or addresses as this will form the basis of asserting your proprietary claim to those assets. This is essential in recovering such assets.
Scammers typically seek to convert stolen crypto assets into cash, often using centralised exchanges as their off-ramp. The first step in any successful crypto asset recovery matter is identifying the exchanges used. These exchanges will have established payment rails which allow them to enable the transfer of fiat funds and are crucial to their business operations.
As these payment rails exist within a regulated environment, banks must be comfortable with the funds handled by these exchanges. Consequently, exchanges are subject to a degree of regulatory oversight and compliance mechanisms to satisfy the requirements of typically highly regulated banking entities.
Once an investigator can identify exchanges which have received the stolen assets, your legal team should then enter into dialogue to place them on notice that they have received the proceeds of crime and request they take specific actions. These include freezing the relevant accounts to secure any assets held within, as well as requesting disclosure of any onward transfers and withdrawals from that account which can be used to further trace the stolen assets with a view to recovery.
This draws a line in the sand – the exchange is now aware of the issue and any funds held at or subsequently deposited at that account must now be frozen.
- Seek emotional support
Recognising that you have fallen victim to a scam can trigger intense emotional distress, anxiety, and feelings of isolation. It is important to recognise you are not alone and that these feelings, while overwhelming, are a common response to what can be a very personal breach of privacy, trust and security.
If you find yourself in such a position, consider reaching out to supportive friends and family. Whilst there are also online communities offering support to victims, you should treat these with caution, as these can present attractive hunting grounds for scammers seeking to exploit those at their most vulnerable.
If you find your emotional state severely impacted or you are feeling persistent low, anxious or overwhelmed, it is essential to seek professional medical or mental health support.
As outlined above, acting quickly and methodically within the immediate hours and days after discovering a scam or can significantly improve the prospects of recovery and limit the broader financial and emotional damage.
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