Recover from pig butchering schemes, romance crypto fraud, fake trading platforms, and Ponzi operations in Texas. Leverage the Texas Securities Act, State Securities Board enforcement, and DTPA claims for maximum recovery.
Common Crypto Investment Scams Targeting Texans
Scam Type
How It Works
Recovery Prospects
Pig Butchering (Sha Zhu Pan)
Scammers build trust through dating apps or social media before directing victims to fake trading platforms
Moderate if funds traced to U.S. exchanges; lower for overseas funds
Romance Crypto Fraud
Fake romantic interest requests crypto for emergencies or "guaranteed" investments
Moderate with good documentation and tracing
Fake Trading Platforms
Fraudulent websites mimic legitimate exchanges, show fake gains, block withdrawals
Low to moderate; depends on identifying operators
Ponzi/HYIP Schemes
Promise guaranteed high returns; pay early investors with new funds
Moderate in SEC/TSSB enforcement; civil varies
Unregistered Securities
Token offerings that are actually securities but sold without registration
Higher - rescission rights under Texas Securities Act
Texas Regulatory Advantages
Aggressive State Securities Board - TSSB has issued more crypto enforcement actions than most states.
Texas Securities Act - Provides rescission rights and civil remedies.
DTPA Treble Damages - Up to 3x damages for knowing fraud.
$20,000 Justice Court limit - Higher than most states for small claims.
Realistic Recovery Expectations
Scammers often operate overseas beyond U.S. jurisdiction.
Funds moved to mixers or DeFi are very difficult to recover.
Recovery rates average 10-30% when funds reach regulated exchanges.
TSSB enforcement can freeze assets and compel disgorgement.
Beware of Recovery Scams: Fraudsters often target scam victims again, posing as recovery specialists demanding upfront fees. Legitimate attorneys do not guarantee recovery or request payment in cryptocurrency. The Texas State Securities Board does not charge fees to investigate complaints.
Texas Legal Framework for Crypto Fraud
Texas Securities Act
Tex. Gov't Code Section 4001 et seq.: The Texas Securities Act regulates the offer and sale of securities in Texas. Many crypto investments qualify as securities under the Howey test.
Section 4003.001 Registration: Securities must be registered with TSSB unless exempt. Selling unregistered securities is a violation.
Section 4008.052 Civil Liability: Purchasers of securities sold in violation of the Act may sue for rescission (return of purchase price) plus interest, or damages if they no longer own the security.
Section 4008.101 Fraud: Fraud in connection with securities sales creates civil liability for damages.
Texas State Securities Board (TSSB)
Emergency Cease and Desist Orders: TSSB can issue immediate orders to stop fraudulent offerings.
Administrative Penalties: Up to $10,000 per violation.
Restitution Orders: TSSB can order return of investor funds.
Criminal Referrals: TSSB refers serious fraud to prosecutors.
Tex. Bus. & Com. Code Section 17.46(b): Prohibits false and misleading practices including misrepresentation of investment returns and characteristics.
Section 17.50 Remedies: Actual damages plus up to 3x for knowing violations, plus attorney fees.
Section 17.505: 60-day pre-suit notice required before filing DTPA claims.
Statutes of Limitations
Claim Type
Time Limit
Citation
Texas Securities Act
3 years from sale or 1 year from discovery
Tex. Gov't Code 4008.054
Common Law Fraud
4 years from discovery
Tex. Civ. Prac. & Rem. Code 16.004
DTPA Claims
2 years
Tex. Bus. & Com. Code 17.565
Conversion
2 years
Tex. Civ. Prac. & Rem. Code 16.003
Texas Securities Act Advantage: If the crypto investment was an unregistered security, you have an automatic right to rescission - return of your entire investment plus interest - regardless of whether you can prove the seller intended fraud. This is a powerful remedy for victims of token sales and investment schemes.
Documentation Checklist
Communication Evidence
Complete message history (WhatsApp, Telegram, dating apps, email).
Screenshots of fake platform interfaces and balances.
Phone numbers, email addresses, social media profiles used by scammers.
Investment promises and return projections.
Voice recordings or video calls if available.
Financial Records
Bank statements showing wire transfers.
Exchange withdrawal confirmations and transaction hashes.
All wallet addresses for transfers to scammers.
Credit card statements for crypto purchases.
Investment platform account statements (even if fake).
Blockchain Forensics
On-chain transaction tracing showing fund flows.
Identification of exchange deposit addresses where funds landed.
Cluster analysis linking scammer wallets to known entities.
Professional forensic reports (Chainalysis, Elliptic, CipherTrace) add significant weight for larger claims.
Law Enforcement Reports
FBI IC3 complaint number and confirmation.
FTC Consumer Sentinel Network report.
Texas State Securities Board complaint (critical for Texas claims).
Texas Attorney General Consumer Protection Division complaint.
Local police report if in-person contact occurred.
Act Immediately: Cryptocurrency moves fast. Begin documentation and file law enforcement reports within 24-48 hours of discovering the fraud. Exchanges may freeze funds on fraud reports but require law enforcement involvement for extended holds.
Demand Letter Strategy
Target Selection
Regulated Exchanges: If blockchain tracing shows funds at Coinbase, Kraken, or similar exchanges, demand letters can freeze scammer accounts.
Texas-Based Entities: Any company or person with Texas connections is subject to Texas jurisdiction.
Payment Processors: Banks and processors that handled wire transfers.
Identifiable Perpetrators: If investigation reveals scammer identity, direct demand letters to them.
Letter Components
Victim Identification: Establish your Texas residency and identity.
Fraud Narrative: Chronological summary of the scheme, key dates, amounts lost.
Texas Securities Act Violations: If applicable, cite unregistered securities and fraud provisions.
DTPA Violations: Cite specific deceptive practices under 17.46(b).
Law Enforcement Status: Reference TSSB, FBI IC3, and other report numbers.
Specific Demands: Return of funds, account freeze, cooperation with authorities.
DTPA Pre-Suit Notice (If Applicable)
If pursuing DTPA claims against identifiable defendants, send 60-day notice per Section 17.505.
Specify economic damages, attorney fees sought, and other relief demanded.
DTPA notice not required for letters to exchanges requesting account freezes.
Don't Accuse Exchanges of Fraud: Unless you have evidence an exchange is complicit, focus demand letters on requesting cooperation in freezing and identifying scammer accounts. Unfounded accusations weaken your position.
Sample Texas Crypto Fraud Demand Letter
[Date]
Via Certified Mail and Email
Legal and Compliance Department
[Exchange Name]
[Address]
Re: Fraud Report and Account Freeze Request - Texas Resident
Scammer Wallet: [Wallet Address]
Total Loss: $[Amount] in [BTC/ETH/USDT]
FBI IC3 Complaint: [IC3 Number]
Texas SSB Complaint: [TSSB Number]
Dear Compliance Team:
I represent [Victim Name], a Texas resident who lost $[Amount] to a cryptocurrency investment fraud scheme. Blockchain analysis confirms that stolen funds were deposited to an account at your exchange. I am writing to request immediate account freeze and preservation of records.
JURISDICTION AND VENUE
[Victim Name] is a resident of [County], Texas. This fraud was perpetrated against a Texas consumer, and Texas law applies to this dispute. The Texas State Securities Board has been notified and is investigating.
FRAUD SUMMARY
Between [Start Date] and [End Date], my client was targeted by a "pig butchering" investment scam. The perpetrator, using the identity "[Scammer Name/Alias]" on [Platform], cultivated a relationship before directing investments to a fraudulent trading platform at [Fake Platform URL].
My client transferred:
- [Date]: [Amount] [Currency] - TX Hash: [Hash]
- [Date]: [Amount] [Currency] - TX Hash: [Hash]
- [Date]: [Amount] [Currency] - TX Hash: [Hash]
Total Loss: $[Amount]
BLOCKCHAIN TRACING
On-chain analysis traces funds through:
[Client Wallet] -> [Intermediary Wallets] -> [Your Exchange Deposit Address]
The deposit address [Address] is associated with an account at your exchange. Transaction records are attached as Exhibit A.
TEXAS LAW VIOLATIONS
This scheme violates:
1. TEXAS SECURITIES ACT (Tex. Gov't Code 4001 et seq.): The fraudulent investment was an unregistered security sold in violation of Section 4003.001. My client is entitled to rescission under Section 4008.052.
2. TEXAS DTPA (Tex. Bus. & Com. Code 17.46): False representations about investment returns and safety constitute deceptive trade practices actionable under Section 17.50.
3. COMMON LAW FRAUD: Intentional misrepresentations made to induce investment.
LAW ENFORCEMENT STATUS
This fraud has been reported to:
- FBI Internet Crime Complaint Center (IC3): #[Number]
- Texas State Securities Board: Complaint #[Number]
- Texas Attorney General: Complaint #[Number]
- FTC Consumer Sentinel: Report #[Number]
DEMANDS
Pursuant to your BSA/AML obligations, I request:
1. Immediate freeze of accounts associated with deposit address [Address];
2. Preservation of all KYC documents, transaction history, IP logs, and linked accounts;
3. Confirmation within seven (7) days that the freeze is in place;
4. Cooperation with law enforcement and response to civil subpoenas.
LEGAL NOTICE
Your failure to take reasonable action upon receiving this specific fraud report may expose you to civil liability under Texas law for aiding conversion of my client's property. I reserve all rights.
Please direct communications to owner@terms.law.
Sincerely,
Sergei Tokmakov
Attorney for [Victim Name]
Texas Bar No. [Number]
Enclosures:
- Exhibit A: Blockchain Transaction Analysis
- Exhibit B: Law Enforcement Report Confirmations
- Exhibit C: Communication Screenshots
Yes. Filing with the Texas State Securities Board creates an official record and may trigger an investigation with enforcement powers beyond what civil litigation can achieve. TSSB can issue emergency cease and desist orders and freeze assets. Reference your TSSB complaint number in demand letters to add weight.
You can file suit in Texas and potentially obtain a default judgment if the defendant can be served. However, enforcing judgments against overseas parties is difficult. Focus recovery efforts on: (1) freezing funds at U.S. exchanges, (2) pursuing any U.S.-based entities involved, and (3) supporting law enforcement investigations that can compel international cooperation.
For losses over $50,000 or complex multi-wallet schemes, professional blockchain forensics significantly strengthens your case and recovery prospects. For simpler cases where funds moved directly to a major exchange, you may be able to document tracing yourself using block explorers like Etherscan or blockchain.com.
Attorney Services & Contact
Texas Crypto Investment Fraud Recovery
I represent Texas victims of pig butchering scams, romance fraud, fake trading platforms, and crypto Ponzi schemes. Services include TSSB complaint filing, blockchain tracing coordination, demand letters to exchanges, and civil litigation.
Email owner@terms.law or use Calendly for a paid strategy session.