DigitalBank Intelligence's analysis: After losing funds to a scam, victims are targeted by "recovery companies" that promise to retrieve their money — for an upfront fee. These are almost always secondary scams. Here is how to tell the difference.
The Secondary Scam
After a victim loses funds to a crypto scam, their information often ends up on lists circulated among fraud networks. Within days or weeks, the victim is contacted by a "recovery company" claiming they can retrieve the stolen funds. These companies use the victim's desperation and the public visibility of blockchain transactions to appear credible — they may reference the exact wallet addresses or transaction IDs involved, which they obtained from the public ledger. They then demand an upfront fee for "recovery services" and disappear once paid. This is a secondary scam: the victim is defrauded twice.
How Fake Recovery Companies Operate
Fake recovery companies use several tactics to appear legitimate. First, they reference public blockchain data — wallet addresses, transaction hashes, and exchange names — which anyone can find, but which sounds impressive to a victim who assumes it required investigation. Second, they claim affiliations with law enforcement, regulators, or hacking groups. Third, they guarantee recovery — a promise no legitimate forensic organization can make before examining a case. Fourth, they demand upfront fees, often framed as "tracing costs," "legal fees," or "exchange access charges." Fifth, they may produce fake "progress reports" showing traced funds to justify additional payments. Once the victim stops paying or demands withdrawal, the company disappears.
Red Flags
Several indicators should trigger immediate suspicion: (1) unsolicited contact — legitimate recovery firms do not cold-call scam victims; (2) a guarantee of recovery before examining the case — no serious forensic organization can promise this; (3) an upfront fee — legitimate recovery is typically success-based, with fees charged as a percentage of recovered funds; (4) claims of law-enforcement or hacking affiliations — real firms coordinate with law enforcement but do not advertise hacking capabilities; (5) pressure and urgency — "act now or the trail goes cold" is a manipulation tactic; (6) requests for additional fees after initial payment — the "just one more fee" pattern is a hallmark of secondary scams. Regulators including the FCA and FTC have specifically warned about these patterns.
What Legitimate Recovery Looks Like
A legitimate recovery firm operates differently. First, no unsolicited contact — you approach them, not the reverse. Second, a no-cost case assessment before any engagement — they evaluate feasibility before you commit. Third, no guarantee of recovery — they explain what is and is not possible based on the specific facts. Fourth, success-based fees — a percentage of recovered funds, with no charge if no recovery. Fifth, transparent methodology — they explain how they investigate and what the process involves. Sixth, lawful operations — they verify compliance with local law in every jurisdiction. Seventh, they decline unfeasible cases rather than taking them on with upfront fees.
If You Have Been Contacted by a "Recovery Company"
If you are contacted by a company offering to recover your stolen funds, treat it with maximum skepticism. Do not pay any upfront fee. Do not provide additional personal information. Do not grant them access to your wallets or accounts. Ask specific questions: What is your fee structure? Is it success-based? Will you assess my case for free before I commit? Can you guarantee recovery? (Any "yes" to the last question is a red flag.) Research the company independently — check regulatory warnings, reviews, and their actual track record. If they contacted you unsolicited, that alone is a strong indicator of a secondary scam.
The Honest Path
If you have lost funds, the honest path is to seek a professional assessment from a firm you approached yourself — not one that contacted you. A legitimate assessment will tell you whether recovery is feasible, what the process involves, and what the fee structure is, before any engagement. No serious forensic organization guarantees recovery. The firms that do are the ones most likely to defraud you a second time.