Crypto, Digital Assets, and Scam Recovery

Lawyers Who Actually Understand Crypto

Most legal advice about crypto is written by people who do not understand the technology, or by people who understand the technology and not the law. The first kind treats a self-custodied wallet like a brokerage account and a token launch like a stock offering, and misses everything that makes the situation hard. The second kind gives confident answers about a regulatory landscape that is unsettled and is being litigated inconsistently across the federal courts.

We are in a different position. We have attorneys who worked in the crypto industry before practicing law. When you tell us your funds were drained from a wallet, or that a platform froze your account, or that you are trying to figure out whether a token you are launching is a security, you do not have to explain what a seed phrase or a liquidity pool is before we can help you.

Our Dedicated Crypto Practice: CryptoLawyerNow

Crypto is a large enough part of what we do that it has its own home. CryptoLawyerNow is Wenstrand Law’s dedicated digital asset practice, and its website atwww.cryptolawyernow.com goes deeper than this page can: detailed guides on scam recovery, contracts involving digital assets, crypto payments compliance, and estate planning for digital holdings, along with a regularly updated blog on developments in the law and reviews from clients we have helped. This page gives you the overview and tells you who we are. If you want the detail, or if you are outside New Jersey and New York and want to know whether we can help, start there.

Crypto Fraud and Scam Recovery

This is a dedicated practice for us, and it is the reason many people find this page.

If you have been the victim of a crypto scam, whether it was a fake investment platform, a romance scam that turned into a request for crypto, a phishing attack that emptied a wallet, a pig-butchering operation, an exchange that stopped letting you withdraw, or a “recovery service” that took a fee and disappeared, the first thing to know is that recovery is difficult and we will not pretend otherwise. The second thing to know is that it is not hopeless, and the odds depend heavily on how fast you move.

Here is how it works. We partner with some of the best blockchain investigators in the business. They trace the stolen funds across wallets and chains to the point where the money touched an identifiable exchange or off-ramp. That tracing report becomes the foundation for legal action: subpoenas to exchanges to identify account holders, applications for expedited discovery, asset freezes, and injunctions directed at the exchanges holding the traced funds. In the right case, that gets money back. In others, it identifies the people responsible and supports a civil judgment, a referral to law enforcement, or both.

Two cautions. First, time matters enormously. Traced assets move, and the longer funds sit at an identifiable exchange the more likely they are to move again. Second, be very careful about anyone who contacts you promising guaranteed recovery for an upfront fee. A large share of the “recovery” industry is a second scam aimed at people who were just scammed. We charge for legal work, and we tell you honestly what the realistic prospects are before you spend anything.

We also help people whose assets were on a platform that went bankrupt. The 2023 bankruptcy rulings on the crypto lenders made an important point: where a platform’s terms of service transferred title to your deposits, those deposits became property of the bankruptcy estate and you became an unsecured creditor. The terms of service you did not read decided whether you owned your coins or just had a claim against the company.

Licensing and Money Transmission

If your business holds, moves, or exchanges digital assets for other people, licensing questions arrive earlier than most founders expect.

New York has the most demanding regime in the country. A BitLicense from the Department of Financial Services is required for virtual currency business activity involving New York or a New York resident, and it comes with capital, compliance, cybersecurity, consumer protection, and coin-listing requirements. A limited purpose trust charter is the alternative. New York also has the Martin Act, an unusually broad fraud statute that the Attorney General has used aggressively against exchanges and lending platforms and that does not require proof of intent for some remedies.

New Jersey regulates money transmission under its own licensing statute. Bills aimed specifically at digital asset businesses have been introduced repeatedly without becoming law, and that is a status worth checking rather than assuming.

At the federal level, an exchanger or administrator of convertible virtual currency is generally a money services business that has to register with FinCEN, maintain an anti-money-laundering program, keep records, and file suspicious activity reports. The CFTC treats certain virtual currencies as commodities, which gives it authority over fraud and manipulation in spot markets and full regulatory authority over derivatives.

Crypto and Your Estate

This is the problem we are asked about least and worry about most. A self-custodied wallet secured by a seed phrase that exists only in its owner’s head is, when that person dies, gone. Permanently. No court order can reach it and no executor can recover it. Both New Jersey and New York have adopted versions of the Revised Uniform Fiduciary Access to Digital Assets Act, but those laws govern access to custodial accounts. They do nothing about a private key.

Fixing it takes real planning: express authority over digital assets in the will and trust, an executor or trustee who can actually handle the asset, an inventory of holdings and custodians kept separately from the estate plan, and a key-recovery arrangement (multisig, sharded backup, institutional custody, or a properly structured escrow) that survives you without creating a security risk while you are alive. Valuing a volatile asset for the New Jersey inheritance tax or the New York estate tax raises its own questions. We do this work, and we would much rather do it before it becomes a recovery problem.

Talk to Us

Whether you are launching something, holding something, or trying to get something back, the conversation is worth having early. For more on our crypto practice, visit www.cryptolawyernow.com.

Call (201) 431-6199 or email info@wenstrandlaw.com. Offices in Cranford, New Jersey and on Madison Avenue in Manhattan.