Can a scam trading platform take your crypto?
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ContractsCounsel verified
Can a scam trading platform take your crypto?
Hello!
My name is Dolan and thank you so much for contacting me!
I just had a few quick questions for you:
Can you provide me a little more detail as to what happened? Do they have your cryptocurrency already?
So I do forex trading and have recently gotten into cryptocurrency trading.
I used to think crytpcurrency was a scam, but now I believe in it.
I found what appeared to be a free crypto trading platform so I used it to buy some crypto currency and started trading.
How I think I may be dealing with a crypto scammer since I have asked to get some money in my account withdrawn and they haven't done so yet and keep giving me excuses.
I still own some crypto and am worried that now they may take that as well, if this really is a crypto scam.
Does that make sense?
Yikes! Do you know if they are located in the USA or abroad?
I believe they are located abroad (Singapore maybe).
I have some questions I think I'd want answered.
I'm so sorry about that! How long ago did you ask them for the money and what kinds of excuses have they given you?
Where can I report a crypto scam?
Are there ways to find out if a platform is legitimate or a scam?
What legal recourse can I take to attempt to get my money back?
Are there any regulators involved in crypto?
They keep telling me it is going to take some time to transfer the money. It has been months now and they are far less responsive so I am getting nervous.
Ok! Did you need to tell me anything else? If not, I can start with answering your question.
Yeah and sorry - one last question is if they are able to take my crypto as well. It is hosted in their exchange but my understanding is they wouldn't have my crypto key so not sure if they can do that and transfer it to themselves?
No problem! I’ll certainly address that. Anything else you'd like to add you think is relevant before I answer?
I think that's it.
*Ok! I just need a little time to draft up a high-quality answer. I'll be with you as soon as possible. It won't be terribly long, ok?
ok
I'm so sorry about this situation! I want to address your situation with a detailed response, so if you have any questions, don’t hesitate to ask because this law stuff can get complicated.
So this appears like a scam. The main reason is legitimate cryptocurrency companies are hardly going to make it difficult for you to retrieve the money that belongs to you. Scams like this are extremely common and they lure people in with the promise of very low cost or free trading, but the purpose is to just collect money without actually returning the investment.
To your first question as far as reporting:
- You can contact the International Police (INTERPOL) using this link: https://www.interpol.int/en/Contacts/Contact-INTERPOL
- File a complaint with the Consumer Financial Protection Bureau here: https://www.consumerfinance.gov/about-us/blog/so-how-do-i-submit-a-complaint/
- A complaint with the FTC can be filed starting here: https://consumer.ftc.gov/media/video-0054-how-file-complaint-federal-trade-commission
- A complaint can be filed with the SEC: https://www.sec.gov/tcr
- A complaint with the FBI can be filed starting here: https://www.ic3.gov/Home/ComplaintChoic
To your 2nd question:
- You can always call the FTC or the Commodity Futures Trading Commission to determine if they are registered.
- Do your own research of the team itself through the Internet.
- Try independent reviews.
- Analyze the website’s customer support.
To your 3rd question:
You may want to consider just writing a formal demand letter for your money back, advising them that you will follow through on those complaints to those government agencies. I drafted a template for situations like this at this site: https://www.contractscounsel.com/t/document-form-checkout/256. This template is about 90% cheaper than hiring a local lawyer. So you can send this in any way you want—it can be text, email, certified mail, or in person.
To your 4th question:
Nothing specific yet for cryptocurrency companies abroad, but the SEC and Interpol are probably your best bet.
To your 5th question:
The answer to your question generally is no; they can’t just take it. It doesn't belong to them. It needs to be returned subject to the terms and conditions of their platform. There may be some small fee for withdrawal, but typically there is never, ever a scenario legally where they can just keep it indefinitely.
OK thank you.
From your experience - does it help to have a lawyer threaten them?
Does the probability you get your money and crypto back if you do so?
In my experience, yes!
If you are in California, I can create a job that would allow me to send a letter on your behalf and I can create the complaints with those agencies for you.
The approximate time for that may be 2-3 hours so it'd probably be about $850 in total. Of course, there is no guarantee that you'll get it back, but it improves your chances.
How much would that cost me?
OK got it.
For sure! Were there any details I missed? Were there any concerns you still needed to be addressed?
I've got a bunch of messages and emails from these guys.
I think I will hire you to send a demand letter, but let me review everything and can get you bullet points to better explain the situation.
Does that sound OK? It may take me a few days and can come back to you.
For sure! Please take your time. We're here for you and you're the boss.
Great sounds good - thanks Dolan. Will be in touch.
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