Why a crypto recovery offer asks for a fee first

How it works

A recovery offer starts with a list. Someone who lost money to a crypto investment scheme has already been identified as a person who sends money to strangers, and that information does not disappear when the first scheme ends. The FCA's page on recovery room scams says "the people behind the original scam may operate the recovery room and contact the victim again pretending to be from a different firm or sell on their details to other recovery rooms."

The approach is built to look official. The FBI's Internet Crime Complaint Center has described it in two public service announcements. In June 2024 it warned of "fraudsters posing as lawyers representing fictitious law firms" who claimed to have received information on the victim's case "from the FBI, Consumer Financial Protection Bureau (CFPB), or other government agency." Its August 2025 update adds the techniques it was then seeing:

• impersonating real lawyers and law firms, with "fictitious documents with a legitimate law firm insignia or letterhead";
• claiming to be "official authorized partners" of US and foreign government or regulatory bodies;
• citing agencies that do not exist, "such as the International Financial Trading Commission (INTFTC)";
• telling the victim they are "on a government-affiliated list of scam victims" and can recover their money "through legal channels";
• asking to be paid "in cryptocurrency or prepaid gift cards", or saying that "payment of bank fees is required to verify identity and ownership to withdraw funds."

The last step is always the same: a payment before anything is returned. It may be called a legal fee, a tax, a bank fee or a verification charge. Whatever its name, it is the product.

Claims a real agency never makes

Each of the following is a sentence from a US or UK authority, and each contradicts something a recovery caller says.

• On fees. "Law enforcement does not charge victims a fee for investigating crimes" (FBI, 2024). "The US Government does not request payment for law enforcement services provided" (FBI, 2025).
• On partners. "There are no law firms which are officially authorized partners of US Government agencies" (FBI, 2025).
• On refunds in general. "Neither government agencies nor legitimate organizations will ever ask for money or financial info in exchange for help getting a refund", in the FTC's consumer alert of 3 August 2026, which adds: "Anyone who does is a scammer."
• On who is calling. The FCA says recovery rooms may be "impersonating us or claiming to work with the Government, police or other regulator", and may "claim to have a UK presence when they don't."

The FBI does contact victims of crypto investment fraud, which is part of what makes the impersonation work. Its Operation Level Up, according to the 2025 IC3 annual report, "identifies victims of cryptocurrency investment fraud and notifies them of the scam"; it notified 3,780 people in 2025, 78% of whom "were unaware they were being scammed". That contact is a warning to stop paying. Nothing in the report describes it asking the victim for money, and the FBI's own advice is: "If someone claims an affiliation with the FBI, contact your local FBI field office to confirm."

Who may lawfully offer help

In the UK the line is a licence. The FCA says recovery rooms "claim to provide services usually offered by claims management companies", and that "a firm must be authorised by us to advertise or undertake these services in the UK." A firm offering to recover an investment loss that does not appear as authorised on the FCA's register is, by the FCA's own account, not allowed to do it.

In the US there is no single register for recovery help, and the FBI's 2025 announcement offers checks instead: "Request video verification or documentation or a photo of their law license. If this cannot be readily provided, assume they are not legitimate." It also advises requiring "notarized proofs of identity" before going further, and keeping records "including recordings of video chats of all interactions." The FTC's rule of thumb on its refund and recovery scams page is shorter: "Never pay upfront for a refund or help with a refund."

What tracing can and cannot do

A public chain records where the coins went, and a recovery pitch often leads with that: a report, a graph of addresses, a claim that the funds have been "located". Following transfers on a public chain needs no special access. An explorer that attaches owner labels to addresses, such as Arkham, will show the same hops to anyone, and its labels are its own judgement rather than a finding by any authority. The tools are listed under wallet tracking.

Seeing where funds went is not the same as getting them back. Getting them back depends on whoever now holds them freezing them, which a private tracer cannot order. The IC3 report says its Recovery Asset Team works "with financial institutions and FBI field offices to assist in the freezing of funds", and that "time is of the essence"; the report's figures for that work are about bank transfers, and it gives none for crypto. The FBI's 2024 announcement asks victims to include in their IC3 report the transaction details, "to include cryptocurrency address". The addresses and transaction hashes you can look up yourself are what belong in that report.

What it costs

The 2025 IC3 annual report counts recovery scams among its cryptocurrency fraud trends: 10,516 complaints and $1.4 billion in losses for the year. People aged 60 and over filed 2,529 of those complaints and reported $540.5 million. The report's own footnote matters for reading the figure: "Losses may also include losses experienced from previous scams which prompted the contact with the recovery company", so the total mixes the original loss with the fee taken afterwards.

The FBI's June 2024 announcement put a narrower number on the fake-law-firm variant: between February 2023 and February 2024, crypto scam victims "who were further exploited by fictitious law firms reported losses totaling over $9.9 million".

The real cost is a second loss on top of the first, usually paid in a form that is hard to reverse.

What you can do about it

Pay nobody up front, under any name. A fee, a tax, a deposit, a bank charge to "verify" a withdrawal: the FBI, the FTC and the FCA all say the legitimate side of this never asks for one. Payment requested in crypto or gift cards is one of the signs the FBI lists.

Find the agency yourself. If a caller names the FBI, a regulator or a court, look up that body's contact details on its own official site and ask it directly. If the agency cannot be found on any government site, the FBI's advice is to "double check whether such an agency exists."

Report the original loss, free. In the US, file at ic3.gov with the transaction details and the crypto addresses involved, and report the scam to the FTC at ReportFraud.ftc.gov and to your state attorney general, as the FTC's alert advises. In the UK, the FCA says to report it to the FCA on 0800 111 6768 "and then contact Report Fraud".

If you have already paid a recovery firm, stop. The FCA's advice is to "end all contact immediately and do not pay any money or provide any banking details." Report the second payment the same way as the first; the FTC's refund and recovery page links to steps for trying to stop or reverse a transaction.

Check a UK firm's authorisation before you speak to it. A firm offering to recover investment losses in the UK has to be authorised by the FCA for that service. If it is not on the register, the FCA has already said it may not offer the service.

Gather the trail yourself. The addresses, transaction hashes and dates from the original loss, looked up on a public explorer, are what an IC3 or police report needs. Doing it yourself costs nothing and hands the information to the only people who can ask for a freeze.