When it comes to financial crime, few losses feel as devastating as watching your cryptocurrency vanish from your wallet. Victims can actually see their stolen funds sitting visibly on the blockchain—yet there’s nothing they can do to reclaim them. This tragic reality is at the heart of a growing wave of crypto theft scams targeting investors worldwide.

The Pain of Watching Stolen Crypto

Helen and her husband Richard, a UK couple who had spent seven years building up savings in the cryptocurrency Cardano, learned this the hard way. They were not wealthy investors—she worked as a personal assistant, and he was a composer—but they believed in the potential of digital assets to grow in value faster than traditional savings.

They had taken precautions, keeping their private keys secure and maintaining backups in cloud storage. Unfortunately, hackers gained access to those backups. In early 2024, after a small test transaction, the thieves swiftly transferred every coin to their own digital wallet. The couple could only watch helplessly as their savings—worth around $315,000 (£250,000)—moved from one anonymous address to another.

“It was like seeing a burglar stack up all your possessions on the other side of a canyon,” Helen recalls. “You can see them, but you can’t get them back.”

Even though blockchain records every transaction publicly, the thieves remain invisible behind layers of anonymity. Helen and Richard filed reports with multiple police forces and even contacted Cardano developers. They know the wallet address of the criminals—but not their identity. Their next hope is to hire private investigators to track the hackers down.

A Growing Epidemic of Crypto Crime

Their story is far from unique. According to a survey commissioned by the UK’s Financial Conduct Authority (FCA) in 2024, about 12% of British adults—roughly seven million people—owned some form of cryptocurrency. Globally, that number now exceeds 560 million people.

As ownership expanded, so did theft. The pandemic years saw a boom in crypto values, which attracted a surge of cybercriminals. By 2025, losses to crypto crime exceeded $3.4 billion (£2.5 billion), according to blockchain analysis firm Chainalysis. That figure has remained consistent since 2020, showing how deeply entrenched crypto crime has become.

Most of the money is lost in large-scale hacks on crypto exchanges or DeFi platforms. North Korean cyber groups, for instance, stole an estimated $1.5 billion (£1.1 billion) from the exchange Bybit in February 2025. Big firms often cover these losses, shielding users from direct harm. But the real shift in recent years has been the rise in attacks against individuals.

From Corporate Breaches to Personal Targets

Chainalysis reported that the number of individual crypto theft incidents doubled from 40,000 in 2022 to 80,000 in 2025. These personal attacks accounted for roughly 20% of all stolen crypto value—some $713 million (£532 million).

Many victims never report their losses, making the real total likely much higher. Without bank protections or insurance, victims are often left to fend for themselves.

In traditional finance, stolen funds may be reimbursed through banks, credit card issuers, or national compensation schemes. But as the FCA warns, “Crypto remains largely unregulated in the UK and high-risk. If something goes wrong, it’s unlikely you’ll be protected.”

Why Crypto Theft Is So Hard to Stop

Even major exchanges like Binance—which has about 1.4 million UK users—cannot fully prevent attacks. Binance’s page offering theft-recovery advice is ironically blocked in the UK, and the company stopped accepting new UK customers in 2023 due to regulatory issues.

The result is an uneven global landscape: cryptocurrency transactions happen worldwide, but consumer protection remains fragmented. Criminals exploit that gap, targeting victims across borders with little fear of consequence.

Chainalysis calls this the “under-documented frontier of crypto crime.” As big exchanges and wallets harden their defenses, cybercriminals increasingly turn to smaller investors perceived as easier prey. Ironically, being vocal online about owning crypto can make someone more attractive to hackers.

Common Tactics: Old Tricks, Digital Targets

Many modern crypto theft scams rely on age-old techniques: deception, coercion, and exploitation of human trust. Among the most common are:

Phishing scams — Fake websites or messages impersonating crypto exchanges to steal login credentials.
Social engineering — Manipulating victims through trust or authority to reveal security information.
SIM swapping — Taking control of victims’ phone numbers to intercept two-factor authentication codes.
Malware attacks — Infecting computers or smartphones to harvest wallet keys and passwords.

And increasingly, these scams are run by organized groups, blending technical skill with psychological manipulation.

The Social Engineering Enterprise: A Case Study

In December 2025, U.S. authorities charged a group of young hackers known as the Social Engineering Enterprise. Between 2023 and 2025, they stole over $260 million (£194 million) from wealthy crypto holders by pretending to represent legitimate exchanges. Victims were tricked into “transferring” their coins directly to the thieves’ wallets.

The stolen funds were reportedly spent on private jets, luxury cars, and designer handbags—some even handed out at nightclubs. The case shows how traditional greed fuels modern cybercrime.

Physical Threats: The Rise of “Wrench Attacks”

Not all crypto crimes happen online. As digital assets gain real-world value, criminals are resorting to violence to seize them. These physical robberies have become so common that the crypto community has coined a term for them: “wrench attacks.”

The term originated from the grim idea that a thief could force you to hand over your crypto keys by threatening you with a wrench—or worse. And indeed, recent cases show how this has moved from metaphor to reality.

In Spain, a man and woman were attacked by criminals demanding access to their wallets. The man was shot in the leg and later found dead in woodland. In France, the co-founder of crypto security firm Ledger, David Balland, was abducted alongside his wife; police later rescued them, but Balland lost a finger during the ordeal.

Meanwhile, in the UK, police arrested six men after they stopped a car on the road between Oxford and London, forcing one of the occupants to transfer £1.5 million worth of cryptocurrency on the spot.

Why Criminals Are Moving Offline

According to Phil Ariss of blockchain intelligence firm TRM Labs, this shift toward physical violence was inevitable. “Groups already comfortable using force for theft are now targeting digital assets. If it can be laundered, it can be stolen—whether it’s a watch or a wallet,” he said.

Crypto’s mainstream adoption has blurred the line between cybercrime and street crime. A digital wallet, stored on a phone or USB device, can be as lucrative to thieves as jewelry or cash—sometimes far more so.

The Hidden Epidemic of Underreported Theft

Estimating the true scale of crypto theft is difficult. Many victims prefer silence to shame or fear of tax and legal complications. Others simply assume there’s no way to recover funds and never report the crime.

In some cases, victims are partially at fault—by sharing too much online, using weak passwords, or storing recovery keys in unsecured locations. But the rapid rise in scams also reflects a failure of infrastructure: millions of new investors entering the market with little education about digital security.

How to Protect Yourself from Crypto Theft Scams

While no system is completely safe, experts recommend several key precautions:

Use hardware wallets for long-term storage; keep them offline whenever possible.
Enable two-factor authentication (2FA) on all crypto-related accounts, preferably using an authenticator app rather than SMS.
Be skeptical of unsolicited messages or investment offers, especially those claiming urgency.
Limit public exposure; avoid discussing crypto holdings on social media.
Backup recovery phrases securely—never in cloud storage or email.

As cryptocurrency continues to evolve, so too do the threats against it. What hasn’t changed are the criminals’ motives or methods. They still rely on deception, fear, and greed—just delivered through new digital channels.

The Future of Crypto Security

Experts believe that artificial intelligence and better blockchain analytics will help trace stolen funds in the future. However, anonymity remains the cornerstone of most cryptocurrencies, making full recovery nearly impossible once funds are moved through decentralized exchanges or privacy mixers.

For now, prevention is the best defense. As Helen and Richard’s story reminds us, it only takes one small breach—a misplaced password, a hacked backup—for years of investment to disappear in seconds.

“You feel helpless,” Helen says. “But I’m not giving up. If they can trace stolen art or cars, maybe one day we’ll trace crypto too.”

Source: Adapted and rewritten from BBC News reporting on crypto crime trends.