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Crypto fraud recovery: Victim recovers fraudulently obtained Bitcoin

Crypto fraud recovery: Victim recovers fraudulently obtained Bitcoin

crypto fraud recovery

In recent years, there has been a massive rise in investments into cryptocurrencies. Alongside this increased appetite for digital fund investments, there has been a huge surge in sophisticated cryptocurrency scams with many investors falling victim.

Recently, a legal team in England were successful in recovering funds for the victim of a Bitcoin scam. The team were the first to obtain a summary judgment in this type of case from the High Court of England and Wales.

The recovery of stolen cryptos

The firm’s client decided to invest in Bitcoin after seeing an online advertisement from Extick Pro who had also promised to help him in learning how to trade Bitcoin. The claimant invested £450,000 into purchasing Bitcoin and was assisted by Extick Pro traders who advised him on the investment of “trades”. These investments accumulated more than 89 Bitcoin, which amounted at that time to over £1.5 million.

When he was unable to access or withdraw his funds following several attempts, he sought legal assistance.

The recovery of the lost funds was far from simple due to the complex nature of the crypto scam. The identities of the fraudsters were unknown, as false identities had been used in registering the company.

The team were able to recover the crypto assets by finding out that the crypto had been moved to a digital wallet which was operated by cryptocurrency exchange, Huobi Global Limited.

The Barrister convinced the Judge to place a freezing order on the wallet to ensure the fraudsters could not move the Bitcoin if they became aware of the proceedings.

Due to a number of issues and a lack of response to the service of proceedings and the disclosure order, an application for summary judgment and enforcement was made against the digital wallet provider. The team made the argument that the provider had “become a constructive trustee of fraudulent acquired Bitcoin” and therefore, it was possible to make an order for the return of the client’s Bitcoin, which was worth over £1.5 million.

For the first time, the High Court in England allowed for service to take place through the untraditional method of air-dropping a non-Fungible token (NFT) to the blockchain.

Huobi accepted the order and transferred the funds back to the claimant. The court also ordered that the fraudsters should pay the costs of the action, to the great relief of the client.

More information on this case can be found here.

I have been the victim of a crypto scam, what should I do?

If you have been the victim of cryptocurrency fraud, it is vital that you seek legal assistance as soon as possible. The crypto recovery process can be extremely complex, so it is important that you instruct a firm of solicitors who specialise in digital asset recovery.

Annecto Legal work alongside a number of specialist cryptocurrency and NFT law experts, so we can point you in the right direction to help your find the right solicitor for your case, whilst also providing the right funding for your case.

The cost of crypto fraud recovery cases

As these types of cases are new, and likely to be complex, the level of legal costs incurred is likely to be substantial due to the advanced levels of expertise required in running a case.

Although the claimant in the above case was lucky enough to win his case, and also obtain an order for the costs to be paid by the defendant, this is not likely to happen in every crypto fraud recovery case.

As with all types of litigation, losing your case is always a possibility. There is also the possibility that the Judge will not make an order for all costs against the defendant, even if the claimant is successful.

In these circumstances, the claimant would be held responsible for payment of all or some of the legal costs incurred. Fortunately, there are many options available to help you fund your case, or to protect you against any adverse costs orders.

Funding a cryptocurrency fraud case

In order to avoid having to pay out huge amounts of money for your crypto fraud recovery case, it is important that you consider your options in terms of litigation funding and insurance for your case.

Third party funding is an option you may wish to consider for your cryptocurrency case.

Third party funding is a way to finance litigation which is often done through a third party funder. Third party funding acts as a form of non-recourse financing for litigation. Third party litigation providers take on the financial risk of litigation, freeing up cash flow and shifting all the risk off your balance sheet.

In return for taking the risk, the litigation funder will typically seek a share of the proceeds in the region of a fifth to a third of any damages recovered.

Legal expenses insurance may also be an option for your case, and it can be used alongside third party funding.

Specialist Legal expenses insurance, known as after the event insurance, is perhaps best thought of as similar to a ‘swap’. For either no upfront fee or a small upfront fee, the insurer takes on all of the risk of the potential adverse cost award. Therefore, the client has swapped their obligation to pay the defendants in the event of a loss with the obligation to pay the insurer in the event of a win.

This is generally an attractive swap as the client is likely to be in a better financial position following a win than following a loss. Also, the payment to the insurer will only be a percentage of the adverse costs rather than the whole amount.

The actual amount the client will pay for the insurance will depend on how long it takes to settle the case. An early settlement could mean that they pay as little as 15% of the amount insured. If the case goes to trial, it is more likely to be in the 40% to 60% range (depending on the insurer and the case).

Contact Annecto Legal

Annecto Legal was established to help clients pursue claims and remove any perceived cost barrier to litigation. We can put you in touch with the best crypto currency recovery companies and solicitors to help you retrieve any digital funds you have lost through a scam or fraud. We can also assist by helping you find the best funding option for your case.

Annecto Legal are authorised and regulated by the Financial Conduct Authority FRN: 707558 as an Appointed Representative of 2direct Limited. We are not a firm of solicitors nor a claims management company. We do not receive payments for passing enquiries onto firms of solicitors. The firms we may pass you onto are independent firms and not linked with Annecto Legal in any way. If you proceed to make a claim, we can assist by providing funding or legal expenses insurance for your case.

Get in touch with an expert member of our team to find out more about crypto fraud recovery and which is the right litigation funding choice for you.

Call us today 0800 612 6587, or our Director, Mark Beaumont, can be contacted by email

Get in touch

* Annecto Legal can only assist on case where the loss is in excess of £100,000, with the exception of data breach claims. If you need assistance on a claim worth over £100,000, please get in touch using our form or the details below:

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Annecto Legal Ltd, 106 Kennedy Building, Murray Street, Manchester , M4 6HS

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71 Central Street, London, EC1V 8AB


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