Why đŻ% of "Bitcoin Recovery" Services Are Scams đ±
Tens of billions of dollars in Bitcoin are stolen every year. In response to victims of crypto crime, an entire cottage industry has popped up promising âcrypto scam recovery.â Hundreds of businesses promise creative ways to get stolen your crypto back. The reality is that 100% are scams. Here is why:
Why All "Crypto Recovery" Services Are Scams:
Can a Bitcoin recovery service help get my stolen Bitcoin/Ethereum/etc back?
The first and most important thing you should know is that there is absolutely no way to reverse confirmed Bitcoin/cryptocurrency transactions. Once a transaction is confirmed on the blockchain, there is no way to reverse it.
Beware of âBitcoin recoveryâ scams
There are many âBitcoin recoveryâ services that claim to be able to return stolen Bitcoin. They will have all kinds of explanations of how they do this.
Here is a debunking of the most common recovery methods:
Lawyers:Â
What they promise: we will prosecute thieves and force them to return stolen Bitcoin
Why it wonât work:Â
In almost all cases, you wonât know the identity of the people who stole your Bitcoin. Itâs nearly impossible to find out the real-world identity of the owner of a given Bitcoin address.
Even if you have a name, email address, âregistered trading account,â website, etc, it will be very difficult to obtain the cooperation of the police in getting their real-world identity.
The police donât care about âsmall-scaleâ theft. In most cases, the thieves will be in a different country than you. Furthermore, unlike cash, there is no paper trail to follow. Bitcoin/cryptocurrency is generally considered âpropertyâ rather than money, and hacking isnât given the same weight as theft of physical goods. All of this makes authorities unlikely to pursue cases.
Even when the identity of the thieves is definitely known, the Bitcoin is rarely returned. The only cases where Bitcoin has been recovered in a theft have been in a class-action lawsuit (such as with Mt Gox). Even then, it usually takes thousands of victims, at least tens of millions of dollars stolen, expensive attorneys, and many years.
Iâm not saying itâs impossible. Just donât expect to send a random lawyer $5000-$10,000 (typical ârecoveryâ fees) and anything to happen. Itâs a scam.
âEthical hackersâ
What they promise: we will hack the thieves and get them to return your Bitcoin.
Why it wonât work:
First, anyone who was able to steal your money is already a sophisticated hacker. Most âhackersâ prey on the technologically ignorant. Anyone capable of stealing your Bitcoin probably knows the tricks of so-called âethical hackersâ.
Second, itâs nearly impossible to find out the real-world identity from a Bitcoin address or an email address. If the U.S. government struggles to find find out who operates darknet markets, what hope has some hacker you paid $10,000?
Third, even an âethical hackerâ has to break into someone elseâs systems â and probably break some laws in the process. If they can someone break into peopleâs computers to get their Bitcoin, why should they return it to you? Why do they need you at all? If they can hack peopleâs computers to steal Bitcoin, they are just as likely to steal yours.
There are no credible, independent reports of anyone successfully doing this. âEthical hackersâ that return Bitcoin for cash upfront do not exist. Itâs a scam.
Blockchain hackers
What they promise: we will hack Bitcoin or brute force your private key to reverse the transaction and return your Bitcoin.
Why it wonât work:
The market cap of Bitcoin is $700 billion dollars. Every single Bitcoin transaction and address is public. If someone could steal or reverse a Bitcoin transaction, they wouldnât be helping you. They would be going after the richest Bitcoin wallets worth tens of billions of dollars. Of course, once it got out that Bitcoin could be hacked, the exploit would either be patched, or Bitcoin would become worthless.
No matter how brilliant they claim to be, itâs a scam.
Chainalysis
What they claim: we will trace Bitcoin transactions to the service holding them, and force them to return your money.
Why it wonât work:
Chainalysis is a real thing. There are companies that keep databases of addresses used by criminals and gambling sites, and help exchanges ban those customers.  Unfortunately, they canât help you for a few reasons:
First, they have expensive products for businesses and governments that the random recovery service you found online probably doesnât have access to.
Second, the most they can do is trace which major exchange or business got your Bitcoin. At this point, you would need the cooperation of the exchange to tell you which customer made that deposit. That cooperation is impossible to obtain without a court order, which as previously explained is nearly impossible to obtain. Furthermore, thieves donât use cooperative exchanges in the first place, since they require KYC. If they want to cash out, they are going to use some less-reputable service in a country that probably does not cooperate with your government.
Third, once your crypto hits an exchange, itâs impossible to trace what a given customer does with it next. If someone simply deposits Bitcoin with an exchange, you will never know when they take it out or move it. This is because exchanges combine all their funds, so your stolen Bitcoin will be given to whoever requests a withdrawal first. It will not be withdrawn by the person who deposited it.
Fourth, criminals donât keep Bitcoin at exchanges. In my experience, they will either sit on it for years or cash it out immediately. They are not stupid enough to keep it where it can be confiscated, however unlikely that is.
Itâs a scam.
Conclusion:Â
It is nearly impossible to return your stolen cryptocurrency. Donât lose more of your money in vain.
Am I wrong? Are there other ârecoveryâ methods I forgot to mention? Please let me know.
My Wallet Was Hacked. What Do I Do?
First, there is a small qualification that unconfirmed transactions can be reversed or canceled. In a few cases, Iâve been able to reverse transactions that havenât been confirmed yet. Itâs rare and requires immediate action. Usually, this happens with wallets that receive mining payments, as they require much higher fees to confirm.
Second, if your Bitcoin keys, logins, seed, etc have been leaked or exposed, but the thieves have not yet sent it away, you must act immediately to transfer it to a new private wallet.
Third, realize that if someone has stolen your Bitcoin, you may still be vulnerable to theft. You probably did something wrong or were exploited by someone who can do it again.
Donât go out and buy more Bitcoin. You need to perform a security audit to understand how it was stolen. You may have a keylogger tracking all your keystrokes, or a root exploit that allows someone to access all your files. Educate yourself. Learn about the most common cryptocurrency scams. At a minimum, read my article on how to safely store Bitcoin.
Fourth, make sure your crypto was really stolen. You should see a transaction to an address that does not belong to you on a date/time you did not make any transactions.  If youâre not sure, ask for help. If you donât see an outgoing transaction, it was not stolen - youâre doing something wrong.
Fifth, if your Bitcoin was stolen, and you held it before August 2017, check to see if the BCH/BSV/BCHA forks have been claimed. Do this immediately, before the crooks do.
Sixth, if you still have assets in your compromised wallet such as NFTâs or server nodes, but canât access them because of a sweeper bot, I can help, so get in touch ASAP.