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Do the police work against scammers and fraudster in the crypto world?

How can someone report to law enforcement a fraud in crypto space?

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    It would be helpful to know where you are, since different jurisdictions have different laws.
    – Ron Trunk
    Apr 25, 2022 at 13:29
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    Cryptocurrencies are based on the idea that government intervention should be minimized. They therefore use technologies to make such interventions effectively impossible, even if interventions like consumer protections and anti-fraud measures would be desirable to you. Transactions are anonymized or at least pseudonymized. It is not possible to reverse transactions. So, while you can report the scam, there is realistically not a lot that law enforcement can do, and you should not expect to recover the funds.
    – amon
    Apr 25, 2022 at 13:30
  • @amon It's more than zero possibility. Just like they can sometimes catch scammers who use cash.
    – user253751
    Apr 26, 2022 at 16:40
  • There's also the question whether it was a genuine scam or you just made a bad investment or worked with the worlds most incompetent company. I personally think you have to be an idiot to invest in bitcoin (for very simple mathematical reasons), that doesn't mean it is necessarily a scam.
    – gnasher729
    Jan 26 at 9:24

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How can someone report to law enforcement a fraud in crypto space?

The City of London Police have the national lead for fraud and, via Action Fraud, they adminster the online reporting tool or one can make a report by...

... calling 0300 123 2040 Monday to Friday 8am - 8pm. If you are calling from abroad please call +44 300 123 2040.

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Legally speaking, there is no such thing as "crypto space". Everyone operates within their local legal system. The recent scandal around FTX/Alameda is a good example that shows that the "crypto world" can't just ignore the laws of the "real world"

Even though most legal systems do not recognize cryptocurrency as legal tender, cryptographic tokens (fungible or not) can still be considered a property asset with a non-negligible monetary value. So when someone causes another person to lose a crypto-asset, then they can potentially be held liable for damages in a civil lawsuit.

And there is usually criminal liability, too. Using fraudulent methods to cheat someone out of their property is usually just as illegal as cheating someone out of legal tender. Further, if scammers use hacking to accomplish their goal, there are certain "anti-hacking laws" that criminalize unauthorized access and manipulation of computer systems. Those can also be employed against crypto scammers.

But one problem with crypto technology is that they are often designed in a way that attempts to anonymize participants. You can't take legal actions when you don't know against whom. However, crypto is often not as anonymous as people think it is. At some point a scammer will have to convert cryptocurrency into legal tender. At that moment they have to interact with the banking system, which links their identity on the distributed ledger to their real identity. And the public distributed ledger can serve as very strong evidence in court that certain transactions did indeed happen.

And then there is the problem that law enforcement organizations around the world tend to be a bit behind the time and in many cases lack the know-how and resources to properly deal with cryptocurrency-related crime. So it is very well possible that when you report a cryptocurrency-related crime against you, that police and prosecutors don't really understand what you are trying to tell them or how to investigate the matter. So when it's not about too much money, they might drop the case because the effort to investigate is too high compared to the severity of the crime.

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  • There was an article about two police officers trying to hunt down child sex offenders. They found about 12,000 people had subscribed to some godawful website, and they managed to identify (safely enough for conviction) over 1,000 of them. One case was the headmaster of a school who used photos of his 10 year old daughter as payment. He is now a former headmaster and single.
    – gnasher729
    Jan 26 at 13:38
  • @gnasher729 OK, but what does that have to do with cryptocurrency? We're they making child abuse NFTs or something?
    – nick012000
    Jan 28 at 11:33

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