Initial Coin Offering (ICO) Scam Recovery: 3 Best Strategies

Research reveals that 80% of initial coin offerings (ICOs) are fake, causing people to lose billions of dollars each year in ICO scams. For instance, this research paper claims that out of $15.38 billion, $10.12 billion was scammed in ICOs, with an average loss of $17.57 million per ICO.

If you have fallen victim to such ICO scams, here you will find the best practices to recover your lost investments.

First, let’s understand ICO scams and their types. Knowing about ICO scams and their types will help you stay secure next time.

An initial coin offering (ICO) is a way for start-up companies in cryptocurrency to raise funds from future users. In most cases, this is done by encouraging customers to give out active cryptocurrencies, such as bitcoin or any other well-known one, in return for a discount on the new crypto coins.

There have been several instances of ICO fraud, where con artists go to great lengths to deceive investors, including renting fake offices and producing high-end marketing materials.

Every month, dozens of new cryptocurrencies are launched, and this trend usually leads to numerous ICOs.

In 2020 alone, despite cryptocurrencies being heavily battered, there was increasing interest among many potential investors.

This is what makes them attractive to fraudsters. After all, if investors have shown that they are ready to put their money into highly speculative cryptocurrency, then it follows that they will not hesitate to invest in fraudulent tokens or ICOs.

Recovering from ICO scams is essential because it enables victims to get back their money and holds those who swindled them accountable for their actions.

There are two best ways to recover lost investments from ICO scams. The first one is reporting such cases to law enforcement or regulatory bodies, which is a precursor for investigations to start, with a chance of arresting these fraudsters.

The second one is to hire an ICO scams recovery specialist to get your lost money back.

We have discussed both options here.

If you have already filed a complaint, reached out to legal bodies to take legal action, and nothing has happened (as it often does), then reaching out to a recovery expert is a great option.

You can email here for a free consultation with an ICO scams recovery expert.

Some common ICO scams include:

There are a few common types of ICO scams that you should be aware of:

  1. Dead, Fake, or Both: Some ICOs are listed as “dead” by aggregators like DeadCoins and Coinopsy. If an ICO is identified as having a fake team, project, wallet, social media presence, or trading activity, it falls into the “fake” category.
  2. The Classic Exit Scam: This occurs when ICO developers and promoters disappear without providing any information, leaving investors empty-handed. It’s categorized as an “exit scam.”
  3. Compound Scams and Exploding Airdrops: In some cases, the same group of scammers conducts multiple scams across different projects, categorized as “previous scammers.” Airdrop scams involve scammers stealing private keys from users who click on links expecting free tokens, resulting in the loss of their coins.
  4. Exchange Scams and Copy-Pasters: Scammers often choose fraudulent exchanges to launch their ICOs, categorized as “exchange scams.” Another tactic is copying the white paper of a promising ICO and launching it under a similar or different name, known as “white paper plagiarism scam.”

What to do if you encounter a scam ICO:

There is also the fear that some ICOs could be used for money laundering, which poses a real threat. That’s why it’s very important to take action against ICO scams.

The SEC has been warning about this scam since there are few investor safeguards in the new field of ICOs. But as the issue is global, it makes it very hard to detect some of these advanced pyramid schemes.

So, it’s your responsibility if you find any fraudulent ICOs, expose them by blowing a whistle and reporting them.

These institutions have different roles and join hands to address the situation. They are the SEC, FBI, CFTC, FinCEN, etc., which are involved in regulating and combating financial crimes related to cryptocurrencies.

If they found any suspicious activities or ICO is found a scam, they will take action.

Strategies for recovering investments from ICO scams:

Firstly, it is important to report a scam to the authorities using the right and legal methods. This may entail reporting the matter to regulatory bodies like the Securities Exchange Commission (SEC) or the Financial Conduct Authority (FCA), depending on your country.

When one reports a scam, it is not only helping themselves but also others who might be victims of similar scams.

Moreover, cooperation with regulatory bodies cannot be left out of the process of recovering from this menace. In fact, these agencies have the necessary capacity and expertise to investigate such fraudulent acts and prosecute the culprits involved.

It therefore becomes important to assist them in whatever way you can help them bring these people to justice by providing information that may include transaction details, communication records, or any other evidence you may have.

The involvement of law enforcement agencies may be necessary, particularly where cybercrime is concerned. They operate units that are tasked with handling such crimes and, thus, can facilitate tracking down the scammers.

Additionally, working closely with them by providing relevant information increases the chances of nabbing wrongdoers.

Hire a lawyer:

The lawyer whom you will hire must have experience in crypto scams and will evaluate every point and make you understandable. As such, they understand the law behind and illegalities within cryptocurrency fraud cases and therefore, you cannot find it difficult for your case.

These swindlers know their tricks and must be sued out of business. An experienced attorney will assist you in collecting evidence and filing a strong claim. They will make sure you have been protected at all times and will represent your interests at every turn.

Making a wise choice in an attorney requires a great deal of research. Finding someone who has previously been successful in litigating against such crypto scams is therefore necessary before reading reviews or getting advice from trustworthy sources. You are improving your chances of winning by choosing a knowledgeable lawyer.

Employ a digi-currency tracker:

There might come a time when you need to pull in the experts. Folks specially trained to manage tough scrapes with cryptocurrencies that have vanished—the kind of specialist outfit like Online Investment Scams (OIS). They’ve got all kinds of tricks up their sleeves for locating stolen coins or tracing transactions made on the sly.

Generally, crypto scam recovery experts are quite familiar with blockchain technology and are always ready to tackle the trials of cryptocurrency transactions.

Leveraging a variety of strategies like data crunching and cyber forensics, it’s possible for them to track down funds as well as gather proofs.

To recruit those cryptology experts, the ones called OIS, you’ll need to pour in a decent bit of blood, sweat, and tears. They’re going to help identify who’s behind all this—for taking what was rightfully yours.

Contact OIS recovery team here:

Collaborate with exchanges:

The exchanges are important in safeguarding users from scams and fraudulent activities involving digital currencies.

First of all, the exchanges can report scammers’ wallet addresses. By sharing this information with other exchanges as well as law enforcement agencies, it is possible to mark and identify fraudsters who may be stopped from further engaging in criminal activities.

Secondly, exchanges might freeze or stop suspicious transactions. So, any transaction that seems fraudulent or is tied to scamming can be acted upon promptly so as to keep the users safe and restrict fraudsters from benefiting.

Finally, there must be mutual cooperation between exchanges. By revealing knowledge about known scams, suspicious actions, scam-related wallet addresses, etc., exchange platforms may detect similar trends, which will lead to the arrest of perpetrators and the cessation of all illicit deals.

So, if you have used any exchange or you have tracked the fraudulent companies’ wallet and that belongs to an exchange, you should immediately reach them and tell them the story.

There are chances that you will get your money back and it will also save many others.

Final thought:

It is important to exercise caution.

Investors criticize even the best-performing ICOs and cryptocurrencies for basing their investments on speculation.

This is what makes it difficult to resist the temptation of falling for high-risk areas, even for individuals who have vast experience in investment.

Therefore, as you scout around for new prospects in the cryptocurrency and ICO sectors, approach them with caution. This means that anything that sounds too good to be true probably should not be trusted.

Every little detail should be examined meticulously, taking into account that any omission of key information may indicate a potentially weak model or concept. Seek out independent sources to verify if a project is genuine before investing your money and always try to ask questions that have answers you can’t find.

Moreover, there are enormous opportunities for those who thoroughly understand the cryptocurrency and ICO fields and who can make rational decisions regarding investments. Conversely, many investors have lost huge sums of money due to scams, fraud, or even valid businesses that are just poorly designed and likely will not succeed.