FBI Warning: Fraudsters Impersonate Attorneys to Exploit Previous Cryptocurrency Scam Victims with Deceptive Recovery Plans

The FBI has released an updated warning regarding fake law firms that are preying on victims of cryptocurrency fraud through deceptive recovery schemes, taking advantage of vulnerable groups, particularly the elderly, by masquerading as legitimate attorneys and government officials.

These elaborate scams utilize various exploitation strategies, providing false hope to victims eager to reclaim lost funds from earlier crypto frauds while simultaneously extracting more personal information and money.

Source: IC3

This alert serves as an update to a prior warning issued in June 2024, offering additional indicators of fraud as scammers increasingly focus on individuals who have previously lost money in cryptocurrency schemes.

In 2024, the FBI received more than 149,000 complaints related to crypto fraud, totaling $9.3 billion in losses, which marks a 66% increase from the $5.6 billion reported in 2023.

Individuals aged 60 and above experienced the most significant losses, amounting to $2.83 billion, which constitutes nearly 30% of the overall damages from crypto fraud.

The susceptibility of the elderly demographic makes them prime targets for further victimization through fraudulent recovery services.

Advanced Impersonation Techniques Targeting Vulnerable Victims

Fraudsters impersonate real attorneys and established law firms, creating fake documents that feature authentic letterhead and logos.

They falsely assert connections with various U.S. and international government agencies, despite no law firms being officially recognized as partners of U.S. entities.

The scammers reference non-existent regulatory organizations such as the International Financial Trading Commission while exhibiting detailed knowledge of victims’ past wire transfers, including specific amounts and dates.

They claim that victims are listed on government-affiliated registers of scam victims eligible for fund recovery through “legal means.”

Victims are directed to “crypto recovery law firms” and given instructions to create accounts at foreign banks via seemingly legitimate but fraudulent websites.

Scammers place victims in WhatsApp group chats with alleged foreign bank representatives and attorneys who demand bank fees for identity verification.

The schemes take advantage of victims’ emotional distress and financial urgency while providing a false sense of security through government impersonation.

Payments are requested in cryptocurrency or prepaid gift cards, with scammers refusing video verification or documentation of licenses while keeping communication confidential.

In a discussion with Cryptonews, Crystal blockchain analytics CEO Navin Gupta noted the increasing sophistication of crypto fraud tactics, with AI facilitating highly personalized attacks using leaked data and victim profiling.

How are scammers stealing billions in crypto? We sat down with @CrystalPlatform CEO Navin Gupta as he breaks down the psychology, AI-powered tactics, and the #1 mindset shift that could prevent most fraud.#CryptoScam #Deepfakehttps://t.co/9WQQvGSuED

— Cryptonews.com (@cryptonews) June 24, 2025

“Assume every unsolicited message is a potential attack,” Gupta recommended as a key defense against crypto fraud.

Gupta highlighted that this “mental shift alone filters out 80% of threat vectors” while cautioning that scammers exploit urgency, secrecy, and flattery to manipulate victims.

He emphasized that fostering skepticism serves as the best defense in an industry where technical solutions alone cannot safeguard against psychological manipulation.

Investment Fraud Remains the Leading Category of Crypto Crime

Investment fraud, including “pig butchering” schemes, continues to be the predominant category of crypto scams, with victims being targeted through online relationships before being presented with fraudulent investment opportunities.

Source: Chainalysis

Data from Chainalysis indicates that pig butchering scams have surged 85-fold since 2020, with individual victims losing between $2 million and $4 million.

The FBI has alerted 4,323 victims of cryptocurrency investment fraud, resulting in estimated savings of $285 million.

However, 42 victims required referrals for suicide intervention, highlighting the severe psychological toll of losses from crypto fraud.

California experienced the highest crypto fraud losses, exceeding $1.39 billion, followed by Texas with $738 million. The FBI has confirmed that reported figures likely underestimate actual losses, as many victims do not report their experiences.

In addition to individual targets, organized crime is also on the rise. North Korean hackers alone stole $1.34 billion from crypto platforms in 2024. The scale of these attacks is extensive and systematic, similar to the Bybit $1.4 billion hack earlier this year.

Currently, threats are expanding beyond individual scammers targeting minor victims to encompass institutional platforms and infrastructure.

Ransomware complaints increased by 9% in 2023, marking it as the most significant threat to critical infrastructure. The FBI notified over 5,400 targeted victims between January 2024 and April 2025, with many unaware of ongoing targeting efforts.

The agency advocates for “zero trust” models, suggesting that no unsolicited contact should be trusted by default, aligning with Gupta’s advice as well.

Victims should demand video verification, documentation of law licenses, notarized identity proofs, and validation of claims regarding government employment before engaging in any transactions or communications.

The post FBI Alert: Scammers Pose as Lawyers to Target Past Crypto Fraud Victims with Fraudulent Recovery Schemes appeared first on Cryptonews.