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Cryptocurrencies are digital currencies that are stored in the cryptocurrency wallets, unlike the fiat currency, whose king share is held in banks. Although the cryptocurrencies are not physical currencies and can be stored and used digitally, yet there are possibilities of stolen cryptocurrency. Thus, whether it is the physical currency or digital, it is not at all safe from getting robbed.
There are a couple of reasons for which you can encounter stolen funds. The first and the most common one is that a hacker has hacked into your Cryptocurrency exchange account or wallet and transferred the funds into his own. The second instance could be that you have sent your cryptos to someone unknown who posed to be someone you know. The third possibility could be that you have invested in the wrong company that had scammed you and fled with your cryptocurrencies.
If you happen to be one of them who became the prey of a cryptocurrency hacking scheme, then you are not the only one. A 2019 report on the cryptocurrencies conducted by Kaspersky (a security company) revealed that 19 per cent of survey respondents had been hacked on the exchanges while 15% of them stated that their cryptocurrencies were stolen through frauds.
What To Do If You Find About Stolen Cryptocurrency?
Are you suffering from lost crypto? Well, you might be wondering what your next steps would be. Here we have discussed all the steps that you need to follow as soon as you get to know that there is a theft of cryptocurrency in your exchange or wallet.
Trace Your Stolen Cryptocurrency As Soon As Possible
It would be best if you acted fast for a better solution for stolen cryptocurrency recovery. Suppose you take up a lot of time to trace the stolen crypto funds. In that case, you are deliberately offering the thieves more time for transferring the assets to the cold storage or send funds to the less praised cryptocurrency exchanges or even sending the robbed cryptocurrency through the crypto tumblers or mixing services to mix all of them, that even makes it difficult for the stolen funds to be traced.
“The more sophisticated you are, and the less sophisticated the thieves are at laundering the assets, the better chance you have,” said Benjamin Sauter, a partner at Kobre & Kim law and a veteran of crypto theft cases.
In case you have the funds accumulated in a crypto exchange, then you must connect with the exchange over a phone or a conversation and ask them to freeze the funds quickly. If your luck is in your favour, then the exchange will comply. But in this case, as well you have to spend some extra cash on the lawyers who can fight with the exchanges to freeze the funds or convince the court to issue an order for them so that the funds in the exchanges remain frozen. But if you think you cannot afford the cost of a lawyer, it is better that you try it for yourself.
Identify the Cryptocurrency Thieves
According to Marc Jones, a partner at Stewarts Law in the UK, “In general, to enforce an order requiring fraudsters to pay damages or handover stolen property, ultimately you’ll need to know who they are.”
Jones lets us know that one of the benefits of transacting via the cryptocurrency is that one can find out where the cryptocurrencies have gone. If the crypto coins are gone via an exchange, then it is typically easier to find out about the wallet holder. This is also possible as the cryptocurrency exchanges know your details via the KYC where you fill-up the necessary information to register. From here, you can ask the court to provide orders for the exchanges to reveal the identity of the thieves.
If the exchange holder is a middleman, then it isn’t easy to trace who owns what amount of cryptocurrencies. When coming on to the mixing services, they are not that great as one might think it is. The most prominent example is the Helix mixer which had already proved its inefficiency.
Get Your Cryptocurrency Back
Cryptocurrency theft has been a common issue these days, and there are a handful of ways in which you can get back your stolen cryptocurrency. You need to invest in the right tool or company in order to get back your lost cryptos. We will discuss more on this later in this article.
How To Recover Stolen Or Lost Crypto?
Did you lose your cryptocurrency? Well, you might be wondering how you can get back your lost cryptocurrencies. Here we have listed out all the possible ways by which you can restore your stolen cryptocurrency.
Also, there are patterns of stealing cryptocurrencies:
One pattern shows the way criminals divide the proceeds of a crime in a splitting pattern. “These may occur close to the time of a crime as criminals try to cover their tracks by feeding their loot into systems that divide their winnings into hundreds of tiny transactions,” said Ross and co.
Another is a “peeling pattern” used by some exchanges and gambling sites. “Its operators would pool their money into a single wallet and then they would pay their customers successively, each time sending most of it to themselves at a change address,” said Ross and co.
Hire A Trusted Lawyer
You can go ahead and hire a lawyer who would take care of everything on your behalf. The lawyer can appeal and convince the court to issue an asset preservation order which will freeze the amount (say, Bitcoin) in your cryptocurrency exchange wallet. This is possible because the UK high Court recognizes Bitcoin (BTC) as legal property.
Also, in the US, it is easier to track the stolen cryptos. As you find out who hacked your wallet and stole your saved assets, you can sue the person and freeze the amount stolen and hidden in a different wallet.
Trusting The New Algorithm TaintChain
The latest algorithm has already surfaced the blockchain technology that predominantly helps the law enforcement officials to trace the stolen cryptos and thereby pull a leash on the rate of cyber crime, especially of stolen assets. This new algorithm applies a principle to the Bitcoin wallets. The principle states that – if the first BTCs paid to the wallet are stolen, the first ones paid out can be considered as stolen as well. This algorithm can only reveal the identity of the criminals if they have followed the “first in – first out” technique.
Thus, we come to a point where we can say that tracing stolen crypto is not that easy and not impossible at the same time. The most common solution is to adopt the “lawyer solution” where they can help you out via legal methodologies and convince the court to get you justice. As more people are losing their cryptocurrencies, and the stolen cryptocurrency is gaining more prominence, it is believed that in the near future, there will be more room for newer methodologies that would prevent the cryptocurrencies from getting stolen in the first place.
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