## What happens to bitcoins that are in a ponzi scheme wallet?

1

I bought bitcoins that are stored in Cloud Token wallet. I found out later on that this crypto currency was part of a Ponzi scheme (shame on me). Currently I've had difficulty withdrawing my coins, and no doubt their support has vanished.

I would like to know, is there any way for those coins to be retrieved, or will they just disappear? And is this also the case for all phony crypto currencies?

Question was closed 2020-02-09T10:57:42.760

Unfortunately as is the nature of Bitcoin and crypto currency if it's not your keys its not your coins. In other words if you're trusting someone else with your coins (even an exchange such as binance) you are at their mercy. In the rare very occasion an investigation may happen and if the perpetrators are convicted they may confiscate the coins and do a reimbursement. – Josh – 2020-01-29T18:49:05.393

1

If you send BTC to a custodial wallet (ie, one which you do not control the private keys for), then you no longer have control of your bitcoin (whoever has the private keys is now in control). If you send coins to a website (to buy some tokens, or whatever), then it is the website operators who now have control of your coins.

This is a well-known saying in bitcoin: not your keys, not your coins.

I would like to know, is there any way for those coins to be retrieved, or will they just disappear?

You can ask for the coins back, but if it is a scam, then chances are the scammers will not send you anything. You could report the scam/theft to local authorities, but chances are they will not be able to do much at all.

The coins will not 'disappear', they are just owned by the scammers now.

If you buy a token / cryptocurrency that is created and maintained by some central authority, then you are implicitly trusting that the central authority will not act maliciously. This is quite the opposite of Bitcoin, in which the user can trustlessly interact with the network, depending on no third party to receive/hold/send funds.

Thanks for your response @chytrik. Just to clarify something. I do have the private keys to the wallet (I am assuming thats it is my pincode and Google authenticator), Thing is whenever I try to transfer the bitcoins to another wallet it is stuck in pending.

Unless I am doing something wrong, am I SOL? – hachemon – 2020-01-30T13:48:05.100

No, sorry, the PIN code is not your private keys. Private keys are 256-bit integers, that are used by a wallet to create cryptographic signatures that allow you to spend the coins. A PIN and 2FA (google auth) are just logins for your online custodial wallet account. Most commonly these days, a non-custodial wallet will present the user with a 12 or 24 word mnemonic seed phrase to store as a backup for the wallet (and then privkeys are derived from the seed phrase). If you do not have a seed phrase, you are unfortunately likely out of luck. – chytrik – 2020-01-30T17:11:59.680

@hachemon See https://en.bitcoin.it/wiki/Private_key where it gives the example private key in hexadecimal representation E9873D79C6D87DC0FB6A5778633389F4453213303DA61F20BD67FC233AA33262 It is a secret number that is stored in your wallet. That number provides control over money (without ever being revealed to anyone nor transmitted to other nodes).

– RedGrittyBrick – 2020-01-30T21:07:20.093