Stolen cryptocurrency: what to do - help of a lawyer

BASE (basic) 1.23

advertisement

Consultant # 49

Private performer

Poland / Warshawa

i

Reading time: 10 minutes Total views: 95

Rate:

0

Publication date: 12.10.2024

What to Do if Your Cryptocurrency Was Stolen – Lawyer's Assistance

Cryptocurrencies are becoming increasingly popular, but with their growth, the number of scams and thefts is also on the rise. Cybercriminals use sophisticated schemes to gain access to your digital assets, and they can steal them within hours. Sometimes these actions remain unnoticed for an extended period, making it more challenging to recover the funds.

Step 1: Gather Information

The first step is to collect as much information as possible regarding the crime and the transaction itself. You should gather data about:

1. Wallet addresses (yours and the perpetrator’s).
2. The transaction hash – the unique identifier of the transaction.
3. The virtual location or platform where the cryptocurrency was stolen.
4. Exchanges or services where the cryptocurrency was stored.

This data will assist your lawyer in providing legal support to protect your interests in the criminal case.

Step 2: Contact a Lawyer

If your cryptocurrency has been stolen, you should immediately seek a legal consultation. A lawyer will help you:

• Evaluate your legal options and ensure the protection of your rights.
• Prepare for criminal proceedings related to the theft.
• Communicate with exchanges or platforms where the transactions occurred.

Additionally, your attorney's advice will be critical in defense in criminal proceedings, including any appellate actions that may arise.

Step 3: File a Report with Cyber Police

Your lawyer will assist in preparing a formal report to the cyber police, which is crucial for ensuring criminal liability for the theft. The report will include:

1. A detailed description of the event and the virtual crime scene.
2. Available evidence (transactions, wallet addresses).
3. Recommendations for further investigation.

This process is aimed at identifying the criminal and enforcing appropriate criminal punishment under the law.

Step 4: Tracking the Cryptocurrency

One of the most important aspects of investigating such crimes is tracking the stolen cryptocurrency on the blockchain. This requires the involvement of technical experts and lawyers specializing in cryptocurrency law, who will provide legal aid throughout the process. 

Key Steps in the Cryptocurrency Tracking Process:

Address Identification: Blockchain transactions are linked to unique cryptocurrency addresses. It's essential to track which addresses were involved in transactions related to the crime. Experts can use specialized blockchain analysis tools to trace the movement of cryptocurrency from one address to another.

Pattern Detection: Technical experts look for transaction patterns that may indicate the use of cryptocurrency in criminal activities, such as regular transfers to exchanges or coin mixing schemes. These patterns can help establish connections between criminals and their assets.

Cooperation with Exchanges: Often, cryptocurrency is transferred to exchanges for conversion into another currency or withdrawal into fiat. Exchanges typically require a Know Your Customer (KYC) process, which includes collecting personal data from users. Lawyers can send official requests to these platforms to obtain information about the owners of addresses where the stolen cryptocurrency was transferred.

International Collaboration: Since cryptocurrency is decentralized and has no national borders, the tracking process often extends beyond one country. This requires cooperation with international law enforcement agencies and the involvement of relevant regulators and technical experts from different jurisdictions.

Blockchain Analysis by Experts: Specialized blockchain analysts, using monitoring and visualization tools like Chainalysis or Elliptic, can participate in the investigation. This allows tracking each coin’s path until its possible exchange or use.

Anonymization and De-anonymization: Some criminals attempt to use anonymizing services, such as coin mixers or privacy-focused cryptocurrencies (e.g., Monero or Zcash), to hide their tracks. However, modern blockchain analysis methods can de-anonymize many transactions and trace them back to the ultimate owners.

Why Cryptocurrency Tracking Is Important:

• Recovery of Stolen Assets: For victims of crypto crimes, the tracking process can be the first step in recovering lost funds. By establishing the transaction chain, it’s possible to identify the location of assets or the identity of the criminal, which can aid in their recovery through legal mechanisms.
• Evidence in Criminal Cases: In criminal investigations, blockchain data can serve as substantial evidence of criminal activity. Tracking cryptocurrency can demonstrate the flow of funds and the involvement of specific individuals in fraud, money laundering, or cybercrimes.
• Thus, this step is crucial in both protecting victims' interests and building a strong evidence base for law enforcement agencies.

Step 5: Actions on Exchanges

If the stolen cryptocurrency has reached an exchange, your appellate lawyer can take the following actions:

1. Submit a request to freeze the perpetrator’s account.
2. Prepare legal documents to reclaim the stolen cryptocurrency.
3. Negotiate with exchanges and provide legal services if an appeal is necessary.

Step 6: Filing a Lawsuit

If other methods fail, the next step may involve filing a lawsuit. This could be a claim against the criminal, if their identity has been discovered, or against the exchange if they failed to meet their legal obligations. Your lawyer will guide you through each stage of the process, offering legal support and representation in court.