The United States Federal Bureau of Investigation (FBI) issued a public service announcement on August 13, warning victims of digital asset scams seeking legal advice to recover their funds, that “fictitious law firms” may try to scam them out of further assets or personal data.
In its notice, the FBI said that fraudsters were targeting individuals who had previously been scammed out of some or all of their digital asset holdings, particularly the elderly, putting them at additional risk of losing more funds or even compromising personal data.
The recovery scheme fraudsters often charge an up-front fee and either cease communication with the victim after receiving an initial deposit or produce an incomplete or inaccurate tracing report and request additional fees to recover funds.
According to the FBI, the scammers, often in the guise of fake law firms, are “exploiting victims’ emotional state and financial need to recover funds from a previous scam; and giving victims the sense of safety and security by impersonating or falsely affiliating themselves with multiple government entities.”
The agency added that “contact with scammers impersonating law firms continue to pose many risks, including the theft of personal data and funds from unsuspecting victims to the reputational harm of actual lawyers being impersonated.”
Last Wednesday’s announcement was an update on previous warnings from June 2024 and August 2023, which cautioned people against “an increase in cryptocurrency recovery schemes, which exploit victims who lost cryptocurrency to fraud, scams, and theft.”
The FBI also reiterated that “private sector recovery companies cannot issue seizure orders to recover cryptocurrency. Cryptocurrency exchanges only freeze accounts based on internal processes or in response to legal process.”
Safety measure
In terms of additional due diligence, the FBI recommended that potential victims — among other measures — use a “Zero Trust” model, which assumes no one should be trusted by default and every request should be verified; be cautious of law firms contacting them unexpectedly; request verification of employment for anyone claiming to work for the U.S. government or law enforcement; and keep records, including recordings of video chats of all interactions.
Unfortunately, such mitigating measures are increasingly necessary, with digital asset crime once again on the rise.
Numbers go up
In January, New York-based blockchain security firm CertiK published its ‘Web3 Security Report 2024,’ which revealed that digital asset criminals had a record-breaking year in 2024, stealing over $2.3 billion from victims across 760 reported on-chain incidents, with an average of $3.1 million stolen per incident.
This was backed up by data from blockchain analytics firm Chainalysis, which noted in its January report that “2024 was likely a record year for inflows to illicit actors.”
This upward trend looks set to continue, as August saw blockchain security and analytics company PeckShield Alert publish data showing that hackers stole at least $142 million from the digital asset space in July across 17 attacks, representing a 27% increase from the $111 million lost to scammers and bad actors in June.
While this data did show a decrease when compared to the same period last year, another recent report from Chainalysis indicated that the industry is on track to witness record-breaking thefts in 2025, with over $2.17 billion already stolen from digital asset services as of mid-July.
“With over $2.17 billion stolen from cryptocurrency services so far in 2025, this year is more devastating than the entirety of 2024,” said the firm.
Such damning assessments may well have inspired the FBI to update its warning notice regarding digital asset recovery scams.
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