Crypto glossary
Recovery scam
A recovery scam targets people who already lost crypto, promising to trace and return their funds for an upfront fee, then disappearing with the payment.
Victims of an earlier scam or hack are easy to find: they post in forums, leave reviews and file complaints, and their contact details are often sold by the original fraudsters. Soon after, they receive offers from supposed blockchain investigators, hacker teams, law firms or even government agencies, often with official-looking logos and fake case numbers.
The pitch blends real facts with invented ones. The scammer may correctly describe on-chain transfers of the stolen funds, which anyone can see on a block explorer, and then claim that a fee, tax or software licence is needed to release them. Once the first payment is made, new charges appear. Because the victim is desperate, losses from the second scam can rival the first.
Legitimate tracing firms and lawyers do exist, but they do not cold-call victims, do not guarantee recovery and cannot unlock funds held by criminals for a fee. Real recoveries usually happen through police and courts working with exchanges or stablecoin issuers that froze the money.
Example
Weeks after losing savings to a fake trading app, a victim is contacted by a self-described cyber unit that shows a chart of the stolen USDT and asks for 3,000 dollars to file the recovery claim.