Crypto Journalist
Anas Hassan
Crypto Journalist
Anas Hassan
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The FBI has issued an updated alert warning of fictitious law firms targeting crypto fraud victims with fraudulent recovery schemes, exploiting vulnerable populations, including the elderly, by impersonating legitimate lawyers and government entities.
The sophisticated scams combine multiple exploitation tactics, offering false hope to victims desperate to recover funds from previous crypto frauds while stealing additional personal data and money.
The alert updates a previous June 2024 warning, providing additional red flag indicators as scammers increasingly target victims who lost money in cryptocurrency schemes.
The FBI received over 149,000 crypto fraud complaints in 2024, recording $9.3 billion in losses, representing a 66% increase from 2023’s $5.6 billion.
Americans aged 60 and older suffered the highest losses at $2.83 billion, representing nearly 30% of total crypto fraud damages.
The elderly demographic’s vulnerability makes them prime targets for secondary victimization through fake recovery services.
Sophisticated Impersonation Tactics Target Desperate Victims
Scammers impersonate actual lawyers and legitimate law firms while producing fictitious documents with authentic letterhead and insignia.
They falsely claim partnerships with multiple US and foreign government entities, despite no law firms being officially authorized partners of US agencies.
The fraudsters reference fictitious regulatory bodies like the International Financial Trading Commission while demonstrating detailed knowledge of victims’ previous wire transfers, including exact amounts and dates.
They claim victims appear on government-affiliated lists of scam victims eligible for fund recovery through “legal channels.”
Victims receive referrals to “crypto recovery law firms” and instructions to register accounts at foreign banks with seemingly legitimate but fraudulent websites.
Scammers place victims in WhatsApp group chats with supposed foreign bank processors and attorneys demanding bank fees for identity verification.
The schemes exploit victims’ emotional states and financial desperation while providing false safety through government impersonation.
Scammers request payments in cryptocurrency or prepaid gift cards, refusing video verification or license documentation while maintaining communication secrecy.
In an interview with Cryptonews, Crystal blockchain analytics CEO Navin Gupta identified increasing sophistication in crypto fraud tactics, with AI enabling hyper-personalized attacks using leaked data and victim profiling.
“Assume every unsolicited message is a potential attack,” Gupta advised as the ultimate defense against crypto fraud.
Gupta emphasized that this “mental shift alone filters out 80% of threat vectors” while warning that scammers exploit urgency, secrecy, and flattery to manipulate victims.
He stressed that deliberate doubt serves as the best defense in an industry where technical solutions alone cannot protect against human psychological manipulation.
Investment Fraud Dominates Growing Crypto Crime
Investment fraud, including “pig butchering” schemes, remains the largest crypto scam category, with victims targeted through online relationships before the introduction of fraudulent investment opportunities.
Chainalysis data shows pig butchering scams increased 85-fold since 2020, with individual victims losing $2-4 million.
The FBI notified 4,323 cryptocurrency investment fraud victims, achieving estimated savings of $285 million.
However, 42 victims required suicide intervention referrals, which shows the devastating psychological impact of crypto fraud losses.
California suffered maximum crypto fraud losses exceeding $1.39 billion, followed by Texas with $738 million. The FBI confirmed that reported figures likely understate actual losses, as many victims never report crimes.
Aside from individualized targets, organized crime is also growing. North Korean hackers alone stole $1.34 billion from crypto platforms in 2024. The scale of the attacks is massive and systematic, just like the Bybit $1.4B hack earlier this year.
As it stands now, the threats are growing beyond individual scammers targeting minor victims to now institutional platforms and infrastructure.
Ransomware complaints rose 9% in 2023 as the most prevalent critical infrastructure threat. The FBI notified over 5,400 targeted victims between January 2024 and April 2025, with most unaware of ongoing targeting attempts.
The agency recommends “zero trust” models, assuming no unsolicited contact should be trusted by default, just like Gupta advised as well.
Victims should request video verification, documentation of law licenses, notarized identity proofs, and verification of government employment claims before proceeding with any transactions or communications.
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