A few weeks ago, Sam Bankman-Fried, co-founder of the bankrupt FTX crypto exchange, was accused by US regulators of running a multi-year scheme to defraud investors of $1.8 billion. Nevertheless, fraud in the cryptocurrency market, albeit in smaller volumes, occurs almost daily. Jeff Vertes from www.BestCasinosInCanada.net told us how to protect such assets, about crypto investigations and more.
At first glance, cryptocurrencies and their circulation are full of contradictions. On the one hand, it is an asset, a value. On the other hand, it is not a currency, not money, not even electronic money. Cryptocurrencies are called anonymous, but every transaction can be viewed by anyone at any time.
In many countries, the activities of cryptocurrency platforms are practically not regulated by law and are not controlled by government agencies, or even prohibited. However, cases of its theft are dealt with by government agencies and the mentioned crypto platforms often contribute to such investigations.
Painful cases of cryptocurrency theft
One of the criteria for effectively fighting the enemy is to know him well, so let’s look at high-profile, cynical, and rather painful cases of cryptocurrency theft. 2016 – cybercriminals stole about 120,000 units of cryptocurrency from the Hong Kong exchange platform Bitfnex, which was equivalent to $72 million at the time. The Bitgo asset protection system failed.
In 2018, a well-known video blogger Ian Balin lost about $2 million, which was withdrawn from his wallet in the form of various cryptos during a stream.
There are hundreds of such cases, and thousands more have not even gone public. As you can see, thieves have different methods – from open robbery to serious hacker attacks.
We also have many similar stories in our practice.
In the last month alone, we have received reports of crypto theft totaling more than $5 million.
How can an hour of delay equal $100,000?
Let’s analyze this on the example of one of our cases.
Between 01:30 and 02:00 am, more than 400 ETH were withdrawn from a customer’s wallet. The theft and security gaps were discovered more than 10 hours later, and a lot of time had already been lost.
The lucky hacker, having hacked the security system and obtained the ether, began to do everything to hide the traces of the crime. Various exchangers, dozens of transactions – everything was done by the attacker to safely withdraw the stolen crypto and cover his tracks.
The client asked us to help when more than 12 hours had passed after the theft. We developed an algorithm of actions and contacted law enforcement.
13 hours after the crime, i.e. an hour after the client contacted us, criminal proceedings were initiated, part of the stolen assets were “caught” and frozen, and further transfer of the assets by the perpetrator was blocked.
And this hour, from the moment the client contacted us, registered a criminal case, and froze part of the stolen ether, allowed us to return the equivalent of $100,000 of the stolen crypto to the client.
How did you manage to save the crypto asset so quickly?
Every lawyer has a number of tools with which they can help their clients. However, most conventional legal algorithms do not work when it comes to cryptocurrency.
Moreover, in cryptocurrency investigations, it doesn’t really matter which country’s legislation is used – there is maximum decentralization, which is both exciting and frightening.
We have developed our own mechanism for “catching” stolen crypto and returning it to its owner.
When it comes to theft, whether of a car, wallet, or cell phone, you should definitely get the help of a lawyer. If we are talking about the theft of cryptocurrency, you should contact an analyst who will trace the entire transaction scheme and tell you where your assets went.
The combination of these two specialists in one makes it possible to quickly, accurately, and efficiently track the path of stolen crypto. And then translate it into a language that the legal world understands. Work out the legal part, such as contacting law enforcement agencies and conducting all the necessary investigative actions, obtain a court decision, and then translate jurisprudence in the opposite direction – into the language of cryptocurrency and return the stolen goods.
Why is not everything lost and how much time has passed?
Criminals are often overrated and idealized. Victims believe that the stolen goods are safely hidden or converted into fiat and it is useless to even try to return them.
However, in at least 7 out of 10 crypto investigations, the criminal let the crypto “settle” somewhere quiet, made mistakes, and thus revealed the location of the stolen goods or even his own. As a result, the traps we set worked, and after a few months, we were able to recover the stolen goods.
To summarize, cryptocurrency has long taken its place in the global market. However, like any asset, it needs protection.
The location of the client is practically irrelevant for conducting a crypto investigation in Canada.
Therefore, it doesn’t matter where you are when it comes to cryptocurrency theft, the key is to conduct a quick and effective investigation.
In cases of crypto theft, time is against you, but you shouldn’t give up even with the passage of time, as there is always a chance to recover the stolen goods.