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Crypto Scam Recovery and Funding a Claim

Crypto Scam Recovery and Funding a Claim

crypto scam recovery

In recent years, the rise of cryptocurrencies has sparked unprecedented innovation in financial markets worldwide. However, amidst the enthusiasm and promise, the crypto landscape has also become susceptible to fraudulent schemes and scams.

These scams not only jeopardise the financial security of investors, but also tarnish the reputation of the entire cryptocurrency system, undermining trust and confidence in its legitimacy.

Cryptocurrency scam claims are now becoming more frequent than ever. If you believe that you have been a victim of a cryptocurrency scam, it is essential to seek guidance as soon as possible to attempt to recover crypto assets and/or obtain monetary compensation.

At Annecto Legal, we assist victims of cryptocurrency fraud by introducing them to a solicitor for their case and helping them to secure funding for their case for a crypto scam. Our service is designed to ensure that any business or individual involved in cryptocurrency fraud has the correct support.

Types of crypto scams

Crypto scams come in various forms, each designed to deceive and defraud investors or users of cryptocurrencies. Outlined below are some of the most common types of crypto scams:

  • Phishing scams: Phishing scams involve fraudulent emails, messages, or websites designed to trick users into providing their private keys, passwords, or sensitive information. Scammers often impersonate legitimate cryptocurrency platforms or can even fake celebrity endorsements using computer-generated AI. This can lead users to unwittingly disclose their credentials, which are then used to access their accounts and steal funds.
  • Fake ICOs (Initial Coin Offerings): Fake ICOs involve the creation of fraudulent projects or tokens, complete with whitepapers and websites, to solicit investments from unsuspecting investors. Scammers may promise groundbreaking technologies or revolutionary platforms, but in reality, they have no intention of delivering on their promises, leaving investors with worthless tokens or no returns.
  • Pump-and-dump schemes: Pump-and-dump schemes artificially inflate the price of a cryptocurrency through coordinated buying activity, often fuelled by false information or hype spread by the perpetrators. Once the price reaches a peak, the scammers sell off their holdings, causing the price to plummet and resulting in significant losses for unsuspecting investors.
  • Exit scams: Exit scams occur when cryptocurrency projects or platforms abruptly shut down or disappear with investors’ funds. These scams often involve fraudulent exchanges, wallets, or investment scams that attract deposits from users before vanishing without a trace, leaving investors with no means of recovering their funds.
  • Social media attacks: Social media attacks exploit individuals into divulging confidential information or performing actions that compromise their security. Scammers may impersonate trusted entities or individuals within the cryptocurrency community, such as developers or customer support representatives, to deceive users into disclosing sensitive information and contact details or transferring funds.

These are just a few examples of the many types of crypto scams that exist in the cryptocurrency ecosystem. As the popularity of cryptocurrencies continues to grow, scammers are constantly devising new and sophisticated tactics to exploit unsuspecting users.

Therefore, cryptocurrency investors and users need to remain vigilant and exercise caution when investing in cryptocurrencies or interacting with unfamiliar trading platforms or individuals.

Legal procedures for crypto scam recovery

Under legal frameworks, cryptocurrencies are regarded as property. A solicitor can advocate for the victim to regain control over their assets. Before filing a claim in the High Court on a client’s behalf, solicitors are likely to suggest several investigations. This could involve retaining a blockchain analyst or another cryptocurrency expert to trace assets as well as reporting the matter to Action Fraud.

Additionally, they might advise clients to petition to the court for a Norwich Pharmacal Order (NPO) and/or Bankers Trust Order to access information and/or confidential documents from third parties, such as the cryptocurrency exchange(s) and/or bank(s) involved.

It may be possible to secure a worldwide freezing order and a proprietary injunction from the court against individuals linked to the victim’s cryptocurrency or its identifiable proceeds. In cases where the whereabouts of the defendants are unknown, courts may authorise service outside their jurisdiction.

Funding a crypto recovery scam claim

If you are currently thinking about making a crypto scam claim, it is important to consider all options. There are a number of litigation funding methods that can be used to minimise risk on your behalf when making a claim.  Consideration should always be given to the suitability and availability of alternative funding approaches.

Third party funding: One funding method that is used for crypto scam claims is third party funding. Third party funding acts as a form of non-recourse financing for litigation. Third party litigation providers take on the financial risk of litigation so that clients can pursue a claim without having to worry about the legal fees associated with it.

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. This means that you keep up to 80% of the reward, having taken none of the risk. If the claim is unsuccessful, the funder will lose their investment.

ATE insurance: After the event (ATE) legal expenses insurance is taken out after the event that has led to a dispute has taken place to protect you in the case of your claim being unsuccessful. ATE insurance can protect you from paying for experts and barristers, as well as your opponent’s legal costs, should your claim not be successful.

However, ATE insurance is not free, and it is important to remember that if your case is successful, you may have to use some of your damages to pay the cost of the insurance premium, which will be included in the terms and conditions.

How can Annecto Legal assist?

At Annecto Legal, our professional advisors assist clients in finding the right legal representation for their crypto scam claims. With the right team, it is possible to put in place the appropriate litigation funding and insurance to take the case all the way to court proceedings, if necessary.

Of course, the preference is to recover your assets in a reasonable timeframe. Having the best crypto fraud solicitors to provide recovery services and being fully funded will strengthen your case.

If you are in the process of pursuing a crypto scam claim, then contact Annecto Legal today. We can help find you the right representation, as well as managing your financial risks and sourcing funding for your legal fees.

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


0800 612 6587


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