Crypto Recovery & Digital Asset Fraud
Crypto Recovery & Digital Asset Fraud
- Based in New York and California, our Crypto Fraud, Hacking & Account Takeover Litigation Practice represents victims of digital-asset theft and cybersecurity failures across the United States. We handle complex disputes involving hacked cryptocurrency accounts, unauthorized transfers, frozen exchange accounts, and fraud schemes that result in substantial financial losses.
- Digital assets require robust security. When platforms, exchanges, or financial institutions fail to protect customer accounts—or fail to respond appropriately after a breach—victims are often left bearing the loss. Our attorneys focus on holding responsible parties accountable through arbitration and litigation where the law allows.
- We operate nationwide. Because most major cryptocurrency exchanges, including Coinbase and crypto.com, require disputes to be resolved through arbitration—often administered by the American Arbitration Association—our practice is structured around navigating these forums effectively while preserving all available legal claims.
- Arbitration is not immunity. It is simply a different venue in which the law still applies.
Impersonation of Cryptocurrency Exchange Employees
- One of the fastest-growing and most damaging forms of cryptocurrency fraud involves impersonation of exchange employees. Victims are contacted by individuals claiming to work for well-known platforms such as Coinbase or other major exchanges. These communications often appear legitimate. The scammers use accurate branding, professional language, and internal terminology. In many cases, they already possess personal information about the victim or reference recent account activity.
- The message is urgent and alarming. Victims are told there has been suspicious activity, a security breach, or an imminent risk to their funds. They are instructed to take immediate action to “secure” their cryptocurrency. This usually involves transferring assets to a so-called safe wallet, secure address, or temporary holding account.
- In reality, the destination is controlled by the fraudster. Once the transfer occurs, the cryptocurrency is irretrievably diverted.
- When victims report the loss, exchanges frequently respond by stating that the transaction was authorized and therefore irreversible. That response is not always legally dispositive.
- Impersonation scams raise serious questions about the adequacy of an exchange’s warnings, monitoring systems, customer communications, and fraud prevention measures. Where impersonation becomes widespread or predictable, exchanges may have a duty to respond proactively. Failure to do so can create legal exposure.
- Our practice focuses on identifying whether exchanges met their legal and regulatory obligations in the face of known impersonation threats and whether their failures contributed to consumer losses.
Hacking, Account Takeovers, and Unauthorized Access
- Impersonation schemes often overlap with hacking and account takeover incidents. Victims may be targeted through SIM-swap attacks, phishing emails, malicious links, or malware designed to capture credentials. Once access is obtained, unauthorized transfers can occur within minutes.
- In many cases, the activity is inconsistent with the customer’s prior behavior. Large withdrawals, new wallet addresses, foreign IP locations, or unusual timing may be evident. Yet the transfers are permitted to proceed without meaningful intervention.
- When exchanges fail to implement reasonable safeguards or ignore obvious warning signs, they may bear responsibility for the resulting losses. Our firm investigates how access was obtained, what security systems were in place, and whether the exchange complied with applicable legal standards.
Contractual Disclaimers and Legal Duties
- Cryptocurrency exchanges frequently rely on extensive terms of service that attempt to disclaim liability for hacking, fraud, or third-party misconduct. Consumers are often told that by agreeing to these terms, they have waived any right to recovery.
This is not always correct.
- Private contracts do not override statutory duties. Companies cannot disclaim responsibility for violations of consumer protection laws, cybersecurity regulations, or elder abuse statutes. Courts and arbitrators routinely examine whether contractual provisions conflict with public policy or statutory obligations.
- Where a duty is imposed by law, contractual language may not provide a shield. Our litigation strategy is built around identifying these duties and enforcing them.
Nationwide Arbitration Against Cryptocurrency Exchanges
- Most major cryptocurrency exchanges require arbitration as a condition of account use. These proceedings are commonly administered by the American Arbitration Association or similar forums.
- Most major cryptocurrency exchanges require arbitration as a condition of account use. These proceedings are commonly administered by the American Arbitration Association or similar forums.
- We prepare cases with the expectation that they will be fully litigated. We do not rely on informal complaints or internal review processes. We pursue legally grounded claims supported by evidence and expert analysis.
Cybersecurity Obligations Under New York Law
- New York has enacted some of the most robust cybersecurity regulations in the country. Cryptocurrency exchanges that operate in or service New York residents are expected to maintain reasonable cybersecurity systems designed to protect consumer information and assets.
- These obligations include risk assessments, access controls, monitoring, incident response planning, and ongoing oversight. When exchanges fail to meet these standards and consumers suffer losses as a result, liability may arise.
- Our practice closely examines whether exchanges complied with New York cybersecurity requirements and whether deficiencies contributed to hacking, account takeovers, or impersonation fraud.
Federal Protections and the Electronic Funds Transfer Act
- Although cryptocurrency is often described as existing outside traditional financial regulation, many crypto losses involve electronic fund transfers governed by federal law. The Electronic Funds Transfer Act was enacted to protect consumers from unauthorized electronic transactions and to allocate responsibility between consumers and financial institutions.
- In appropriate cases, EFTA protections may apply to cryptocurrency-related losses, particularly where bank accounts, debit cards, or custodial services are involved. Importantly, consumer negligence does not automatically bar recovery under the statute.
- Our firm evaluates the applicability of federal law alongside state claims to ensure that all available remedies are pursued.
Pig Butchering and Long-Con Cryptocurrency Fraud
- Impersonation scams frequently intersect with so-called pig butchering schemes. Victims are cultivated over time. Trust is established. False account balances and fabricated profits are displayed. Victims are encouraged to deposit increasingly large amounts of cryptocurrency.
- These schemes are sophisticated and emotionally devastating. While the perpetrators may be difficult to pursue directly, liability does not necessarily end with them. Exchanges and intermediaries that facilitate fraudulent transfers or ignore warning signs may still be held accountable.
- We investigate all potential avenues of recovery and pursue claims against all responsible parties.
Elder Financial Abuse and Cryptocurrency Losses
- Older adults are disproportionately targeted by impersonation scams and account takeovers. Many seniors are pressured into transferring cryptocurrency after being told their accounts are compromised or under investigation.
- State elder financial abuse laws recognize this vulnerability and impose heightened duties on institutions that handle the assets of older adults. These statutes often provide enhanced remedies when seniors are victimized.
- Our practice places particular emphasis on representing older clients and their families. We approach these cases with seriousness, diligence, and respect for the significant personal impact of the loss.
A Litigation-Focused Recovery Practice
- Our Cryptocurrency Fraud, Hacking & Account Takeover Litigation Practice is focused on recovery through legal action. We investigate the facts. We preserve evidence. We pursue arbitration and litigation grounded in statutory and common-law principles.
- We do not promise outcomes. We do promise a disciplined, aggressive approach to accountability.
- If you lost cryptocurrency after being contacted by someone impersonating an exchange employee, or if your account was hacked or taken over, you should not assume that the terms of service foreclose your rights. Exchanges have legal obligations. Contracts have limits. Laws still apply.
- Legal remedies may exist, and timely action can be critical.
Our Recent Cases
Our recent cases involve cryptocurrency theft, impersonation scams, account takeovers, and exchange security failures, pursuing recovery through arbitration and litigation against responsible institutions nationwide.
Contact
- New York Office 28 Liberty Street New York, New York 10005
- California Office 1902 Wright Place, Suite 200 Carlsbad, CA 92008
- 800-767-8040