Crypto fraud victims see rising recovery rates with new forensics

Crypto fraud victims are recovering stolen assets at higher rates as blockchain forensics, exchange cooperation and major seizures like the 127,271 BTC Prince Group case reshape recovery odds.

Cryptocurrency fraud victims are recovering stolen assets at increasing rates as blockchain forensic technology advances, according to industry specialists and recent government seizures.

Crypto fraud on the rise

The shift follows the October 2025 Bitcoin (BTC) seizure by U.S. authorities, who confiscated approximately 127,271 Bitcoin from the Prince Group, described as a global “pig-butchering” scam operation. The seizure represented the largest financial forfeiture in American history, according to federal reports.

“The era of ‘your funds are gone forever’ is over,” stated Bezalel Eithan Raviv, CEO of Lionsgate Network, a Tel Aviv-based crypto-asset recovery firm. “The only people who still believe that lie are the scammers who hope victims never contact us.”

While blockchain transactions remain irreversible, forensic specialists report that stolen funds can be traced and frozen when they reach regulated exchanges. The blockchain’s permanent public ledger records every transaction, creating what recovery firms describe as digital fingerprints that can be followed through complex laundering attempts.

Cryptocurrency fraud in the United States reached approximately $5.8 billion in reported cases in 2024, according to industry data cited by Raviv. Scams increased 30-40% in the fourth quarter of 2024, with common methods including romance-based pig-butchering schemes, cloned trading platforms, Ponzi-style liquidity mining operations, and phishing sites impersonating major exchanges and wallet providers.

Professional recovery firms report success rates of 58-72% when cases are reported within 90 days, according to Raviv. However, approximately two-thirds of victims never file reports, he stated.

Crypto fraud recovery, what is the process?

Recovery operations typically follow a four-stage protocol, according to firms in the sector. The process begins with forensic blockchain analysis to trace transactions and identify exchange endpoints. Firms then assess case viability based on factors including timing, whether funds reached regulated platforms, and laundering complexity.

The third stage involves preparing forensic evidence packages and coordinating with law enforcement and regulatory agencies. Final stages include initiating freezes, seizures, and legal actions, with resolution times ranging from weeks to months depending on jurisdictional complexity.

Lionsgate Network combines blockchain forensics with open-source intelligence to identify individuals operating fraudulent schemes, according to company statements. The firm provides law enforcement with identity evidence linking wallets to social media accounts, phone numbers, and email addresses.

Recovery specialists advise victims to verify legitimate services before engaging. Warning signs of fraudulent recovery operations include upfront fees before analysis, guaranteed recovery rates, requests for seed phrases or private keys, and anonymous offshore operations.

Legitimate firms typically offer preliminary forensic analysis without upfront payment, use government-grade forensic tools, coordinate with law enforcement, and never request sensitive wallet credentials, according to industry standards.

Recovery probability varies based on case specifics. Cases with the highest success rates involve funds that reached centralized exchanges within 180 days and complete transaction documentation. Moderate probability cases include funds passed through mixers but reaching identifiable endpoints. Low probability cases involve conversion to privacy coins, peer-to-peer cash-outs, or missing wallet documentation.

“Scammers don’t steal your money because they’re smart. They steal it because victims are unaware and don’t fight back with real force,” Raviv stated. “When victims stand with forensic power, everything changes.”

The October 2025 seizure demonstrated that blockchain transparency combined with forensic analysis and international legal coordination provides victims with recovery pathways, according to recovery firms and law enforcement agencies involved in major cases.