If you may have fallen victim to fraud involving crypto assets (also known as virtual currencies) or a problematic transfer, contacting the police or a consultation service does not always bring your funds back right away. Because of this, some people worry that "the police aren't taking action" or that they will simply have to accept the loss.
However, crypto asset troubles can take time to resolve because transfers are difficult to reverse and a destination address alone often is not enough to identify the sender's counterparty. When an overseas exchange, an overseas website, or a fake account is involved, there is even more information that needs to be verified.
For this reason, it is important to first stop making any further transfers, save your transfer history and any exchanges with the other party, and organize the details so you can accurately explain the situation to whichever body you consult. This article explains why crypto asset troubles take time to resolve, what information to share with the police or a consultation service, actions to avoid, and where to seek help depending on your situation.
Resolving crypto asset trouble can take time
With crypto asset fraud or transfer trouble, contacting the police or a consultation service does not guarantee that your funds will be returned quickly. This is not simply a matter of how the police respond. Crypto asset transfers are difficult to reverse, and even if the destination address is known, it does not necessarily reveal the counterparty's name or location right away.
To stay calm and think clearly, it helps to first understand why resolving crypto asset trouble can take time, and then organize what steps to take next. Below are some of the most common situations where resolution tends to take longer.
Once a crypto asset transfer has been sent, it is difficult to reverse
Once a crypto asset transfer is completed, it is generally difficult to unilaterally cancel it. With a bank transfer, a recall of funds may be possible depending on the circumstances, but crypto asset transfers cannot always be handled the same way.
In addition, while a crypto asset transfer history can sometimes be checked on the blockchain, the destination address alone does not reveal the counterparty's name or location. Unlike a bank account, an address does not display the account holder's identity on screen.
For this reason, even in a transfer that may involve fraud, funds are not necessarily returned as soon as you consult someone. You will need to review the destination address, date and time of the transfer, the amount sent, and the transaction ID as you consider your next steps.
When an overseas exchange or overseas website is involved, verification takes longer
In some crypto asset troubles, the destination or the investment website involved is an overseas service. In these cases, a domestic exchange or financial institution alone may not be able to confirm the details of deposits and withdrawals or how the operator actually runs its business.
Overseas websites can also make it difficult to identify the operating company's location, the person responsible, or a contact point. Even if information is displayed on the site, there is no guarantee it is accurate, which makes verifying the facts harder.
For this reason, when an overseas exchange or overseas website is involved, there tend to be more points that need to be checked before resolution, compared with trouble that is contained entirely within domestic services.
The other party may be using a fake name or fake account
In investment scams that begin on social media or dating apps, the other party may be using a fake name or a fake account. The profile photo, workplace, place of residence, and investment experience shown are not necessarily accurate.
In this situation, the display name or profile alone can make it hard to confirm who you were actually communicating with. If the account is deleted or the name and photo are changed, it can become even harder to trace what happened afterward.
As a result, crypto asset trouble that starts on social media or a dating app can take extra effort to verify who the other party really is. If you were encouraged to invest through remote, non-face-to-face communication only, do not simply trust the information displayed — review the situation carefully.
Information you need to share with the police or a consultation service
With crypto asset trouble, whether you can accurately convey the situation to the party you consult makes a real difference.
Information such as "I sent crypto assets," "I can't withdraw funds," or "I can't reach the other party" alone can make it difficult to confirm the details of what happened. Before consulting anyone, organize when, where, which crypto asset, and under what circumstances you made the transfer.
Specifically, it is important to keep a record of the following:
- Date and time of the transfer
- Amount transferred
- Destination address
- Transaction ID
- The exchange or wallet used
- The other party's name or social media account
- URL of the investment website or app
- Details of any additional payment requests
If you also used a bank transfer or card payment, organize the receiving account, the transfer statement, and the card statement as well. If there was a payment in Japanese yen in addition to the crypto asset transfer, that information becomes important supporting material when you consult someone too.
Also, do not delete your exchanges with the other party — save them as screenshots or PDFs so they are easy to reference later. Screens from an investment website or an app's balance display can also be changed or become inaccessible later, so it is important to save them early.
Actions you should not take when facing crypto asset trouble
With crypto asset trouble, acting out of panic can make the damage worse.
Be especially careful if you cannot withdraw funds and are being asked for an additional payment. If you keep paying in a situation that may involve fraud, you risk losing even more crypto assets or cash, rather than getting your funds back.
Do not pay additional "tax," "fee," or "deposit" charges to enable a withdrawal
If you are asked to pay a "tax," "handling fee," "security deposit," or "unfreezing fee" in order to withdraw funds, do not pay immediately. Even if the request appears to come from a legitimate exchange or financial institution, it may in fact be a fraudulent site.
Japan's Financial Services Agency (FSA) has also warned that there have been numerous cases of people being defrauded of money under the pretext of a security deposit or tax payment when they tried to make a withdrawal.
There have been numerous cases where, after a transaction, a user requested a withdrawal and was then defrauded of money under the pretext of a security deposit, tax, or similar charge. Please do not pay any security deposit or tax to the operator, and do not have any further contact with them.
Source: Financial Services User Consultation Office | Financial Services Agency (FSA)
Even if you are told "you just need to pay this once to withdraw," a different charge is often demanded after you pay. If you receive a suspicious request for payment, consult the police or a consumer affairs center before paying anything.
Do not delete your exchanges with the other party or your transfer history
Messages and transfer history with the other party are important information for explaining the situation when you consult someone. If you block the other party or delete your exchanges out of anger or anxiety, it can become harder to reconstruct what happened afterward.
Of course, you do not need to keep replying to the other party. However, before you cut off contact, it is important to save the exchanges, the profile, any transfer instructions, and screens from the investment website.
The same applies to your exchange or wallet history. Keep your transfer records, transaction IDs, and destination addresses stored somewhere you can check them later.
Do not readily trust businesses that guarantee fund recovery
After falling victim to crypto asset fraud, be wary of businesses that claim they can "definitely get your funds back" or "recover funds with high probability." Such businesses may exploit the anxiety you are already feeling to charge investigation fees or retainer fees, causing secondary damage. Be cautious of anyone who makes definitive claims about fund recovery or pressures you into a contract quickly.
Even when you do need to consult a professional, it is important to check the scope of services, fees, contract terms, the operating company, and whether they hold the relevant qualifications. In particular, if you need legal action or negotiation for a refund, check whether the matter is one that should be handled by a lawyer.
Never send your recovery phrase or private key to a third party
Your recovery phrase and private key (signature key) are critical pieces of information used to move your crypto assets. A recovery phrase is a set of words used to restore a wallet. A private key is the critical piece of information used to send crypto assets held in a wallet.
If a third party learns this information, your crypto assets could be moved out of your wallet. Even when consulting someone or trying to confirm a recovery, never send your recovery phrase or private key by email, chat, or social media. Also be alert to schemes that pose as legitimate support and try to extract this information from you.
Check the right consultation channel for your situation
The right consultation channel for crypto asset trouble depends on your situation — whether it may involve fraud, whether you have concerns about a contract or solicitation, or whether you need legal action all point to different places to check.
If you sent crypto assets and can no longer reach the other party, if you were asked for an additional payment when requesting a withdrawal, or if you can no longer log in to an investment website, you may be dealing with a criminal case. In these situations, consulting the police is the basic first step. For urgent matters, call 110; for non-urgent consultations, you can use the police consultation line "#9110," among other options.
If you have concerns about the terms of a contract or how you were solicited, consulting a consumer affairs center is also an option. The Consumer Hotline ("188") can connect you to your nearest local consumer affairs consultation office. If an unregistered operator or a financial service may be involved, you can also check the FSA's consultation desk.
If you are considering legal action, such as a refund claim or damages, you may need to consult a lawyer. That said, at a stage when you don't yet know who the other party is, it may not be possible to move straight to a specific claim. This is why it is important to organize your transfer history and your exchanges with the other party before consulting anyone.
On the other hand, it is also possible that your crypto assets were not stolen at all, and you simply cannot access your wallet. If an old wallet app won't open, you've forgotten your password, or your balance isn't displaying, recovery may be possible as long as you still have your recovery phrase or private key.
Not every case of crypto asset trouble can be resolved through the same channel. It is important to distinguish between fraud, solicitation-related trouble, matters requiring legal action, and wallet recovery issues, and to identify the consultation channel that fits your specific situation.
Stay calm, organize the situation, and consult the right people
If you may have experienced crypto asset trouble, the anxiety of not getting your funds back right away can be significant. However, acting out of panic — making additional transfers, deleting your exchanges with the other party, or relying on a business that guarantees fund recovery — can make the situation worse.
First, stop any further payments, save your transfer history and exchanges with the other party, and organize the information you will share when you consult someone. The right consultation channel — the police, a consumer affairs center, the FSA, a lawyer, or a specialized recovery service — depends on your situation.
Crypto asset trouble can take time to resolve. That is exactly why it matters to avoid acting on emotion, and instead organize the facts, preserve your evidence, and reach out to the appropriate consultation channel as early as possible.
This article is for informational purposes only and does not constitute financial or investment advice. Please consult a qualified professional before making investment decisions.
