At the same time, Bloomberg wrote in February that the Kremlin and the government estimate the Russian crypto market at $214 billion (16.5 trillion rubles at the exchange rate at that time. And in November last year, the Central Bank estimated the annual volume of transactions of Russians with cryptocurrency at $5 billion (about 390 billion rubles).
At the end of 2020, the Ministry of Internal Affairs of the Russian Federation reported that the number of crypto-frauds and other “acquisitive crimes, where virtual currency acts as the subject of a crime” is growing annually in Russia by 400%. As a reason, the department cited the unclear legal status of cryptocurrencies, difficulties in tracking, and the impossibility of classifying cryptocurrencies as objects of civil rights.
With the development of the cryptocurrency market, hacker threats are also growing. Groups, to which the US government links to the North Korean authorities, such as LAZARUS, APT3, BlueNoroff, and others, are increasingly damaging blockchain projects and their users.
Hacker attacks are not the only way to lose your cryptocurrency. In mid-February, Group-IB working in collaboration with underground operators from bitcoin recovery expert, detected a new wave of digital asset and NFT fraud to which crypto hackers and scammers used the images of Tesla CEO Elon Musk, Ripple CEO Brad Garlinghouse and Ethereum creator Vitalik Buterin to scam cryptocurrencies from victims.
The million-dollar question to victims at the time was “How is this possible? In a nutshell, the crypto hackers and scammers involved in this crypto scam which cost victims a lot of money did so by creating fake streams on YouTube using the above-mentioned high-profile names that have deep roots in the crypto space making the scheme somewhat trustworthy and reliable by victims.
The fake YouTube stream was created using the faces of these crypto billionaires who in the video promise to double user’s investment income made on cryptocurrencies like Bitcoin, Ethereum, Ripple, and even NFTs. In fact, these attackers gained access to victims’ crypto wallets and stole their crypto funds and assets. In just three days, Group-IB specialists in collaboration with underground cryptocurrency recovery expert, managed to identify 36 fraudulent online broadcasts.
Asides from the YouTube stream video scam made using cryptocurrency high profile names, there are still commonly used methods with the crypto scams in which victims still fall prey, phishing links being one of these many methods used to scam and steal cryptocurrencies.
One of the most striking cases in recent times is that of the employees of the Thodex crypto exchange, who were accused of fraudulent use of information systems and the creation of a criminal organization in Turkey. Detainees of this horrifying event can receive prison terms of up to 40 years each. According to the indictment, the losses incurred by users of the Thodex cryptocurrency exchange platform amounted to 356 million litas ($24 million).
Talking about high-profile cases in Russia, at the end of March, the Ministry of Internal Affairs opened the first criminal case of embezzlement by a co-owner of a centralized cryptocurrency exchange.
The funds were appropriated by a co-owner of the trading platform who was apprehended and detained after cashing out an excess of 190 million rubles in two travel suitcases while looking to make his way out of Russia. The detainee was charged and taken into custody, with his bank accounts frozen and a petition sent to seize his properties worth more than 2 billion rubles.
My cryptocurrency was stolen. How to return it?
Firstly, contact BLOCKCHAIN RECOVERY CENTER and file a crypto loss or crypto scam complaint with them and their recovery specialist will contact you for recovery.
They are the best crypto recovery service experts and are highly praised for their success rate in recovering lost and scammed cryptocurrency. Furthermore, you need to prevent any possible losses from your wallet or other wallets.
You need to make sure they are safe or take steps to protect the funds. For example, if there is suspicion that the address may have been compromised, you need to carefully transfer funds to a secure wallet.
The main thing is to do this without unnecessary pressure and not to rush otherwise you can make a mistake when transferring and lose even more money.
Cryptocurrency is not in Danger
After making sure that the remaining cryptocurrency is not in danger, try to add as much security as possible. If you communicated with a scammer, write down his contact details, take a screenshot of all correspondence, the site, and wallet addresses to which they use, and had you send money to and provide it alongside your complaint to Blockchain Recovery Center, for immediate crypto recovery assistance.
These data will also be needed by the authorities during the investigation, and in court, they will act as evidence in order for the victim to claim damages.
Blockchain is a transparent system that keeps a history of all transactions. Your transfer to the attacker and further movements of the cryptocurrency can be easily tracked by recovery professionals from Blockchain Recovery Center using sophisticated tools and blockchain browsers.
Thanks to the observers, it will be possible to trace the further fate of the cryptocurrency. In the worst case, scammers may try to have victims confused by sending crypto to a special service known as a bitcoin mixer which can still be traced by professionals of Blockchain Recovery Center.
In the most favorable scenario, the attacker will send the stolen funds to a centralized platform. In this case, you will need to write to the support service as soon as possible and ask to freeze the funds. However, crypto exchanges most likely will not take any action without a request from law enforcement.
Unauthorized withdrawal of cryptocurrency from a wallet in most countries is regarded as theft, said Yury Borisov, a teacher at Moscow Digital School. He added that the application must be submitted at the place where the offense was committed.
This can be both a plus and a minus. This is a plus because the wallet does not have a specific territorial binding. Therefore, de facto, law enforcement agencies may not be limited in terms of territorial reference. The downside is that, for example, in Russia, the Ministry of Internal Affairs uses the fact of indefinite territoriality as a reason to refuse.
Cryptocurrency was stolen from you
If your cryptocurrency was stolen from you in Russia, then you can fill out the form directly on the website of the Ministry of Internal Affairs, providing all details concerning the theft and the addresses of all wallets to which the victim may have sent crypto funds to or the scammer most have had the victims crypto funds sent to, say a representative of the “EXMO.me crypto exchange.
He advises that a letter should be written to the exchange where the stolen funds are located, attaching copies of the letters to the Ministry of Internal Affairs. Without a request from the Ministry of Internal Affairs, the exchange will most likely not be able to do anything, but in this way, you can draw the attention of compliance to the wallet where the stolen funds are stored and possibly speed up the process.
In addition, if the money came to a wallet on a crypto exchange from a wallet flagged for scam, then it is most likely that both the sending and the receiving wallet will be blocked and the crypto exchange will require the recipient to provide proof and source of funds. To do this, the fraudsters will need to show where he/she/they purchased the crypto from (there will be a need for checks/statements/screenshots from the account of the sender or mail), and also state with proof what the crypto was purchased for.
If you managed to track your lost/scammed crypto to a foreign jurisdiction, first of all, try to contact the crypto exchange service. Many custodial services can freeze a suspicious account without a court order.
It is also advisable to contact the services of a criminal lawyer in the victims’ country. In the United States, it is important that the lawyer or firm practice in the state in which the wallet or exchange is registered, if the search can be narrowed down to the state.
Next, the lawyer will ask you for evidence and he will turn to law enforcement agencies. A complaint directly from a foreigner will most likely not be considered, the lawyer says. But if the case is large and there have already been many appeals, you will be connected to an ongoing case or investigation, the lawyer emphasized.
The law does not establish any standard list of documents when applying to law enforcement agencies, said Yefim Kazantsev, a member of the Commission for the Legal Support of the Digital Economy of the Moscow Branch of the Russian Bar Association.
According to him, any documents that can help in finding offenders and bringing them to justice can be submitted.
Moreover, if the location of the attacker is unknown, it is advisable to file a complaint in the victim’s country of residence. This has its advantages and disadvantages.
Talking of crypto theft in Russia, legal actions can be taken against the fraudster once identified or apprehended by blocking the wallet address holding funds belonging to the scammer and his bank accounts which is possible.
Depending on the situation, this can be implemented as a seizure of property in criminal proceedings (Article 115 of the Code of Criminal Procedure of the Russian Federation) or as an interim measure in the framework of civil or arbitration proceedings (Article 140 of the Civil Code of the Russian Federation and Article 91 of the Arbitration Procedure Code of the Russian Federation), said Yefim Kazantsev.
In addition, it is worth going to court with a claim for the return of unjust enrichment and a statement on securing the claim. At the same time, you need to understand that the investigation of the criminal case and the trial do not guarantee the return of the cryptocurrency.
At the moment, the market is at an early stage of development, so in most countries, including Russia, it is still not sufficiently regulated.
All of the above actions increase the likelihood of getting your assets back. However, one must understand that law enforcement agencies do not yet have rich expertise knowledge, and resources in conducting such investigations. Therefore, the main part of the work to find their own cryptocurrency falls on the shoulders of cryptocurrency recovery agencies and experts like Blockchain Recovery Center.
There are analytical companies as well as law firms that specialize in crypto scams and bitcoin recovery and an embodiment of such a company has a specialized service when it comes to legal practitioners who can prepare all documents required for the recovery process, bitcoin recovery experts who are top professional blockchain developers to perform all sorts of cryptocurrency recovery.
They work in collaboration with both local and international law enforcement agencies in any country when it comes to investigation and collecting evidence. This increases the chances of a successful crypto and bitcoin recovery to restore the victim’s crypto funds and/or assets.