Q: What legal steps can I take after a crypto scam with CashApp and Coinbase in Illinois?

A: Hello,

We understand the distress caused by cryptocurrency scams, particularly when financial platforms deny liability. Given the nature of your case—unauthorised transactions on CashApp and Coinbase—you may have several legal and strategic options to pursue recovery.

Immediate Actions to Strengthen Your Case

Since you have already filed a police report, ensure that it contains all necessary details, including transaction records, correspondence with CashApp and Coinbase, and any evidence of unauthorised access. Fraud reports should also be filed with the Federal Trade Commission (FTC) (reportfraud.ftc.gov) and the Internet Crime Complaint Center (IC3) (ic3.gov) to document the incident for law enforcement.

Additionally, if your bank account was linked to either platform, you should notify your bank immediately. Under the Electronic Fund Transfer Act (EFTA), financial institutions have obligations concerning unauthorised transactions. Some banks may offer fraud protection even if the transactions occurred through third-party services.

Legal Avenues for Recovery

1. Consumer Protection and Fraud Claims

Illinois has strong consumer protection laws under the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA), which prohibits deceptive or unfair business practices. If CashApp and Coinbase failed to implement adequate security measures or wrongfully denied reimbursement, you may have grounds for a claim. You can report this to the Illinois Attorney General’s Office (illinoisattorneygeneral.gov) and consider initiating a formal complaint.

2. Regulatory Complaints Against CashApp and Coinbase

Both platforms operate under regulatory oversight, and complaints to the appropriate authorities can increase pressure on them:

• Consumer Financial Protection Bureau (CFPB) (consumerfinance.gov) – Handles disputes related to financial services, including CashApp.

• Securities and Exchange Commission (SEC) (sec.gov) and Financial Crimes Enforcement Network (FinCEN) (fincen.gov) – If there are indications of broader fraudulent activity, reporting the scam can contribute to enforcement actions.

• State Financial Regulator (Illinois Department of Financial and Professional Regulation, IDFPR) (idfpr.illinois.gov) – You may be able to file a complaint about financial misconduct.

3. Civil Legal Action

If informal resolutions fail, you may consider civil litigation. Depending on the amount lost, a claim could be brought in Illinois small claims court (if under USD 10,000) or through a larger civil lawsuit for fraud, negligence, or breach of contract. A legal action against the scammers themselves may also be possible if their identity is known, although this is often challenging.

Challenges and Practical Considerations

One of the key difficulties in crypto-related fraud cases is tracking and recovering funds, as cryptocurrency transactions are designed to be irreversible. However, forensic blockchain investigations can help identify the scammer’s wallet and possible off-ramps where funds were converted back into fiat currency. If funds were transferred to an exchange, subpoenas could be issued to compel information about the recipient.

In some cases, engaging blockchain forensic specialists, such as our firm, can be crucial in tracing fraudulent transactions and uncovering potential legal avenues for recovery.

Next Steps

• Gather all documentation, including transaction records and communication with CashApp and Coinbase.

• Follow up on existing police reports and regulatory complaints.

• Consider additional regulatory complaints with the CFPB, IDFPR, and FinCEN.

• Consult a legal professional with expertise in cryptocurrency fraud and consumer protection to assess the viability of civil claims.

Should you need more information, do not hesitate to contact us.