Asked to pay tax before withdrawing crypto
Legitimate crypto platforms never require upfront tax or fee payments from your personal funds before releasing your balance. If an account manager demands additional deposits to unlock your money, stop sending funds immediately, as this is an advance-fee fraud scheme.
- This fraud usually begins when you try to cash out profits from an investment platform, only for the company to insist that government taxes, insurance, or anti-money-laundering fees must be paid separately first.
- A clear sign of deception is when the platform refuses to deduct fees directly from your existing account balance and instead demands that you transfer fresh funds to a specific, unverified deposit address.
- Stop sending any further payments immediately, refuse requests to verify your identity with further financial deposits, and secure your email, banking, and exchange accounts by updating passwords and enabling two-factor authentication.
- Preserve all written communications, including chat transcripts, email demands, website addresses, deposit instructions, and exact transaction hashes showing where you sent your crypto from your own wallet or exchange account.
- Report the incident to Action Fraud online or by telephone, inform your UK bank if you sent fiat currency to fund the account, and notify the compliance desk of the exchange where you purchased the assets.
- An onchain trace can map how your funds moved across public ledgers and identify recipient exchange deposit addresses, but it cannot override transactions, compel foreign entities to return money, or guarantee fund recovery.
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Written by the Wallsec investigations team. General information only, not legal or financial advice.
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