The Rise of Fake Crypto Lawyers
As regulatory scrutiny on cryptocurrency increases, many victims of scams seek legal recourse to recover lost funds. Scammers have taken advantage of this desperation by posing as legal professionals, offering fraudulent recovery services for a fee. These fake lawyers claim they can retrieve stolen assets, but they only extract more money from already victimized individuals.
On June 24, 2024, the FBI issued alert number I-062424-PSA, which announced that “fraudsters posing as lawyers representing fictitious law firms may contact scam victims and offer their services, claiming to have the authorization to investigate fund recovery cases… In some instances, scam victims have contacted fraudsters on fake websites, which appear legitimate, hoping to recover their funds.”
If you are a victim of a cryptocurrency scam, you must protect yourself from crypto recovery schemes involving illegitimate lawyers and law firms.
In addition to following the FBI’s guidance, we want to empower victims with the knowledge to find a legitimate, reputable, and experienced crypto recovery lawyer.
How These Scams Operate
The scam typically begins when a victim searches online for ways to recover stolen cryptocurrency. Fraudulent recovery firms use aggressive online advertising to appear at the top of search results, claiming they have successfully retrieved millions in lost assets.
Once a victim reaches out, the scammers employ the following techniques:
- Initial Consultation Scam – Victims are offered a “free consultation” where they are pressured into believing immediate action is necessary.
- Phony Legal Agreements – Fake legal contracts are provided to make the transaction seem legitimate.
- Additional Hidden Fees – Once the initial payment is made, scammers demand further payments for court fees, investigations, or international legal filings.
- Ghosting the Victim – Once the scammers have extorted as much money as possible, they disappear, leaving victims in an even worse financial position.
Real Lawyers vs. Fake Recovery Firms
While there are legitimate legal professionals specializing in cryptocurrency fraud, there are key differences between real attorneys and scammers:
- Legitimate lawyers have verifiable credentials, which can be checked through bar associations.
- Real law firms do not guarantee asset recovery, as blockchain transactions are often irreversible.
- Genuine attorneys follow ethical billing practices, unlike scammers who demand excessive upfront fees.
- True legal professionals operate within the legal framework, not through vague, unverifiable methods.
Red Flags When Searching for a Crypto Recovery Lawyer
Demanding Upfront Fees
Legitimate lawyers and law firms WILL NOT demand upfront fees.
If a lawyer or law firm requires you to send them money before working with you or evaluating your case, it is likely a crypto recovery scam.
At Berg PC, our cases are handled on a contingency basis. We are paid with a portion of any recovery.
We do not ask for fees upfront. If there is NO RECOVERY, there is NO FEE.
Asking for Sensitive Information
Scammers posing as lawyers may ask for sensitive data, such as wallet keys, account credentials, Social Security numbers and other personal information you regularly protect.
Legitimate lawyers and firms will never ask for such information. They do not require it to work with you or evaluate your case.
Never give out sensitive data, and avoid lawyers and firms that demand it from you.
Making Unrealistic Promises
Anyone promising quick recovery of your crypto is likely a scammer or a lawyer with little understanding of crypto recovery in court.
You should avoid both.
Cryptocurrency fraud and recovery are developing areas of law. Even if you have made it to court and filed a suit, recovering your crypto does not happen overnight.
Legal procedures must be followed, and rules must be obeyed before any final relief is granted.
In some cases, you will need to produce documents, give testimony, and even have a trial.
Practically speaking, crypto recovery takes months. In large cities, where dockets are crowded, and courts handle thousands of cases at a time, it could take years.
Legitimate lawyers and firms will be transparent about the challenges and limitations of recovering your crypto. They will not make unrealistic promises or guarantees.
Unlicensed in Their State
All lawyers must be licensed in their state to practice law.
You can easily check if a lawyer is licensed by going to your state’s online Bar Association.
For example, all the trial lawyers at Berg PC are licensed in Texas.
If you go to the Texas State Bar Association’s website (texasbar.com), you can type in the name of our lawyers and our law firm to see our licenses. Search results also include:
- The lawyer’s name
- Their eligibility to practice in your state
- The firm they work for
- Their practice areas
- Law school location and graduation date
- Complaints filed against the lawyer for any misconduct
If the lawyer you are considering is not listed in your state’s online Bar Association, do not engage with them further.
Don’t Settle. Find the Right Type of Lawyer.
Spotting and avoiding crypto lawyer scams are imperative for protecting yourself, but you shouldn’t settle for the first legitimate lawyer you find.
A reputable lawyer or firm without immediate red flags may not be the right fit for you.
The type of lawyer you hire will likely dictate the outcome of your case.
You need a lawyer who has tried cases and understands cryptocurrency, the blockchain, and the workings of the crypto economy.
Here are other important ways to evaluate the lawyers you are considering:
Go Above and Beyond with Your Research
When considering a lawyer and law firm, diligently research them to ensure the information matches the data you gather from your state’s Bar Association.
You should also check third-party reviews, client testimonials, and notable accolades to ensure the firm is credible and experienced, especially in crypto recovery.
It also never hurts to ask local friends and family if they know the lawyer and law firm you are considering.
Don’t Be Afraid to Ask Lots of Questions
If you choose to contact a lawyer or law firm, there are questions that a reputable and experienced crypto lawyer should be able to answer, including:
- How long have you practiced law?
- What is your primary practice area?
- How many trials have you have led?
- What is your win-loss record?
- Have you handled cases like mine before? How many? What were the results?
- What is your fee agreement?
- What are the potential outcomes for my case?
- What is the legal process of crypto recovery?
- How long will recovering my crypto take?
Find a Firm Using IOLTA Accounts
Texas law firms, like Berg PC, are required to use Interest on Lawyer Trust Accounts (IOLTA), which lawyers use to responsibly hold client funds and give you peace of mind.
While it is not mandatory in all states, IOLTA programs are available in all 50 states. Choosing a lawyer and law firm using IOLTA accounts is an extra safeguard for you and your money.
You can verify the existence of the IOLTA accounts associated with the law firm you are considering by working with your state’s Bar Association and IOLTA program.
Find your state’s information at the ABA Directory of IOLTA Programs.
The Need for Stronger Consumer Protection
Legal authorities must crack down on fraudulent recovery operations and increase awareness about these scams. Law enforcement agencies and regulatory bodies must work together to:
- Improve oversight of online legal services related to cryptocurrency.
- Hold fraudulent firms accountable through stricter penalties.
- Educate the public on recognizing and avoiding crypto-related frauds.
In the meantime, you must remain vigilant, conduct due diligence, and consult with verified legal professionals when dealing with cryptocurrency disputes. The rise of crypto scammers posing as lawyers highlights the ever-evolving nature of digital fraud. As cryptocurrency continues gaining mainstream acceptance, so will the deceptive tactics scammers use.
Raising awareness and promoting strong regulatory measures can help prevent further financial losses and ensure that legitimate legal avenues remain accessible for those needing them.
Contact a Cryptocurrency Recovery Lawyer in Houston, Texas
Berg PC is committed to fighting cryptocurrency fraud and further developing legal strategies to make the recovery of stolen money possible.
Geoff Berg and our cryptocurrency recovery lawyers will do everything they can to reclaim what is rightfully yours.
If you wish to learn about our developing crypto recovery results and strategies, please visit the dedicated Cryptocurrency Fraud & Recovery page of our website.
If you have any questions, call (713) 526-0200 or contact us online.