Cryptocurrency fraud: how to recover your funds?

Vitalii Petryk

Attorney at law · Lexon (LF LEXON)

Cryptocurrency fraud has become one of the most widespread online crimes, and recovering lost funds can be difficult because of the anonymity of transfers and the cross-border nature of the schemes. In this material attorney Vitalii Petryk explains which steps help to secure evidence, launch criminal proceedings and seek compensation. Below is a general algorithm for a victim and the legal tools provided by Ukrainian law.

Is it realistic to recover funds in cryptocurrency fraud?

Recovery is possible, but the result depends on how quickly you act, how complete the evidence is and whether the movement of assets can be traced. Cryptocurrency transactions are recorded on the blockchain, so even where the offender identity is hidden the movement of funds can be analysed. Assets often pass through exchanges and exchangers that identify their customers, and this opens a route to establishing who is behind them. The most common schemes are fake investment platforms, counterfeit exchangers, phishing sites and psychological manipulation disguised as dating or lucrative earnings. The sooner the victim acts, the higher the chances of blocking the withdrawal or preserving the assets. At the same time no lawyer can guarantee recovery, since much depends on the specific circumstances.

What to do in the first hours after the fraud

The most important thing is to record all evidence at once and delete nothing. Practical steps:

• save correspondence, screenshots, links to sites or applications and advertising materials;
• write down wallet addresses, transaction identifiers (hashes), amounts and dates of transfers;
• record details of the counterparty: nicknames, phone numbers, payment details, names of exchangers;
• if funds went through a bank or payment system, notify it without delay and find out whether the operation can be stopped;
• do not transfer additional funds at the request of a so-called recovery service, as this is a common second layer of the scam.

The materials gathered will form the basis of the report and the subsequent investigation.

Where to file a report: cyber police and National Police

A fraud report is filed with the National Police, in particular with cyber police units, including through the electronic system for citizens applications. Under Article 214 of the Criminal Procedure Code of Ukraine information about a criminal offence is entered into the Unified Register of Pre-trial Investigations, as a rule within 24 hours of the report, after which the pre-trial investigation begins and the applicant receives an extract. If information is not entered without valid reason, such inaction can be challenged before an investigating judge. The report should set out the circumstances, amounts and transfer details clearly and include all available evidence, since a detailed description speeds up the investigator work and reduces the risk of formal refusals.

Under which article is crypto fraud classified?

Such acts are most often classified under Article 190 of the Criminal Code of Ukraine (fraud). That provision defines fraud as taking possession of another property or acquiring a right to property by deception or abuse of trust. Liability increases depending on the circumstances, in particular where the act was committed repeatedly, by a group upon prior conspiracy, in a significant, large or particularly large amount, or by an organised group. The amount of damage affects the classification, so a correct calculation of losses matters from the outset. The legal regulation of virtual assets in Ukraine is still developing, but this does not prevent fraudulent acts from being classified under existing rules. The final legal assessment is made by the investigator and the prosecutor in light of the evidence gathered.

How attachment of assets helps to recover funds

Attachment of property is a procedural measure that allows assets to be blocked temporarily in order to preserve them for possible compensation. Under Article 170 of the Criminal Procedure Code of Ukraine an attachment is imposed by an investigating judge or a court on the application of a party, in particular to secure a civil claim and possible confiscation or special confiscation. If funds have been moved to bank accounts or to crypto exchanges that identify their customers, it is possible to seek the blocking and attachment of those assets. Cross-border cases use international cooperation and engagement with platforms that hold user data. Prospects should be assessed realistically: if the funds have already been converted, split between wallets or moved abroad, recovery becomes harder, although it remains possible with proper work.

A civil claim in criminal proceedings: how to recover losses

A victim may bring a civil claim directly within criminal proceedings. Under Article 128 of the Criminal Procedure Code of Ukraine the claim is filed before the trial begins against the accused or the person who is liable by law for the damage caused. This route has practical advantages:

• the claim is heard together with the criminal case;
• it relies on evidence gathered during the investigation;
• the civil claimant is exempt from court fees for claims for compensation of damage caused by a criminal offence.

The amount claimed must be supported by documents, so it is important to keep all confirmations of transfers and the calculation of losses. If no claim is brought in the criminal proceedings, it can be pursued later in civil proceedings.

How a lawyer handles a crypto fraud case

A lawyer helps you act systematically at every stage, from securing evidence to recovering losses. The scope of work usually covers:

• assistance in collecting and properly documenting evidence;
• drafting the criminal offence report and procedural applications;
• representing the victim before the investigator and the prosecutor;
• seeking attachment of assets and preparing the civil claim;
• challenging inaction of the pre-trial investigation bodies;
• protecting the rights of a person served with a notice of suspicion where defence is required.

Timely involvement of a lawyer helps to avoid typical mistakes, in particular loss of evidence or missed procedural deadlines. Every case is individual, so the specific steps are determined after analysing the documents. A lawyer does not promise a predetermined result but builds a well-founded legal position appropriate to the circumstances.

This material is informational and is not legal advice or legal assistance in a specific case. To assess your situation and choose a strategy, contact a lawyer.