Most cryptocurrency recovery services are scams

The value of all existing cryptocurrency is $2.33 trillion, according to Bankrate. Cryptocurrency, such as Bitcoin, is a digital currency created using encryption algorithms, Oswego State University of New York says.

Using a cryptocurrency requires some kind of cryptocurrency “wallet,” which is where you store your encryption keys that confirm your identity and link to your cryptocurrency. The wallet is software that can be stored in a cloud, on your computer, or on your mobile device, Oswego State University of New York says.

If you lose access to your crypto wallet, you lose your entire cryptocurrency investment. There’s also the risk that your cryptocurrency can be stolen through hackers or scammers. Coindesk says people who use cryptocurrencies lost $2 billion to hacks and scams in 2023.

Nicholas emailed VERIFY to ask if there are any legitimate services that offer to help people recover stolen cryptocurrency.

Can crypto recovery services actually recover stolen cryptocurrency?

No, crypto recovery services cannot actually recover stolen cryptocurrency.

Crypto recovery services that offer to recover lost or stolen cryptocurrency are scams. While there are a few legitimate companies that can help you with account or technology issues, those companies will not offer to recover stolen funds.

Sometimes, scammers will try to convince you they can get your money back by impersonating the government, a company or any other organizations. Others may be able to trace where the lost cryptocurrency went, but will have no way of actually recovering your lost assets as promised, the New Jersey Department of Justice says.

Typically, the scammer will reach out to you over social media, email, a messaging app or will bait you into contacting them through a seemingly legitimate advertisement or website, the Commodity Futures Trading Commission (CFTC) says.

“At first, the scammer will appear to be knowledgeable, organized, and trustworthy while convincing you they can get all your money back,” the New Jersey Department of Justice says. “They will either ask for a fee for their services or ask for your financial information to put the lost funds back into your account. Either of these will result in further losses that are largely irreversible.”

The New Jersey Department of Justice recommends you do not pay anyone who contacts you with an offer to recover any money you’ve lost in a scam. The FBI says not to share any financial or personal identifying information and to not send any money if an unknown individual contacts you and claims to be able to recover your stolen cryptocurrency.

Legitimate crypto recovery companies offer password and data recovery services or help regaining access to your crypto wallet, Aura and Bitdefender, both cybersecurity companies, say. This may include recovering the wallet’s data from a broken or damaged storage device, decrypting encrypted wallets or recovering lost passwords. These companies will only charge you after they’ve successfully recovered your wallet.

“It’s important to note that legitimate recovery services will never promise to recover your lost or stolen Bitcoin because it’s nearly impossible,” Bitdefender says. “Scammers, on the other hand, may make such promises and ask for an upfront fee because they know they cannot deliver.”

The only time you might be contacted about legitimate restitution is if you’re part of a government investigation or legal proceeding. In these situations, you would receive a letter in the mail. The CFTC has tips for verifying this type of mailing here. 

If you do fall for this scam, the CFTC recommends you notify local, state and federal law enforcement and regulatory agencies, including the CFTC.