What Is Cryptocurrency Recovery?

 

Cryptocurrency recovery refers to attempting to regain access to a wallet or account that was compromised or otherwise lost. This can occur as a result of a stolen private key, hacking, hardware or software failure or even theft by a family member or caretaker. While reversing market losses is nearly impossible, legitimate recovery services may be able to restore access under certain circumstances.

A crypto wallet is a program that lets you store your cryptocurrency and generates the private keys that let you spend or transfer it. The private keys are algorithmically derived from a string of words that your wallet provides. Those words are called your recovery phrase and they must be retrieved in order to access your crypto. Your wallet’s maker cannot see your recovery phrase, which is why it is a good idea to keep it somewhere safe like on paper or in an encrypted password manager.

As a result, it is not always possible to get your money back once you lose it to a scam. This is because cryptocurrencies are bearer assets, meaning that ownership is determined by whoever holds the private key. There are some cases where assets have been recovered through the insolvency of exchanges such as Mount Gox, but these are very rare.

Scammers often offer so-called recovery Cryptocurrency recovery services to people who have been victims of crypto scams. They typically promise to help them get their money back if they pay them a fee or provide personal information. However, it is nearly impossible to recover any money that was lost to a scam in this way, and you should never give anyone your passwords or financial information to any company that claims to be able to recover your crypto.

Many of these companies have fake websites and social media accounts that feature fake testimonials from made-up customers with glowing reviews. They also may make fake press releases that are picked up by news outlets, as well as post snippets of those releases in forums and discussion pages to add credibility. These scams are known as advance-fee fraud and are designed to take advantage of people who are already harmed by other fraudulent activities.

The FBI Internet Crime Complaint Center has warned that recovery scams have cost victims over $2.5 billion in 2021. Anyone who believes they were victimized by a cryptocurrency recovery scheme is encouraged to contact their local FBI field office. For more information, please visit the FBI’s website.