Crypto Tracing

Your crypto funds have now been stolen, the next step is to choose a Crypto Tracing company to trace your funds in a court-approved manner.

How to Choose a Crypto Tracing Company

Prior to retiring from the FBI on December 29th, 2023, I investigated the Pig Butchering Scam for approximately three years. In that time, I received numerous crypto tracing reports from private sector companies, none of which I could use in my case simply because they were done incorrectly.

So how do you choose the correct crypto tracing company to help you with your case? Even if a Tracer has attended numerous crypto tracing classes resulting in certifications, it doesn’t matter if they produce a report that is not recognized by the courts; traces need to be done in a manner that the courts recognize. That is what makes Cyber Asset Recovery Experts different. We have the experience to produce products that can be used by law enforcement and recognized by the courts.

Crypto Tracing FAQs

If I find a wallet containing my stolen funds, how much can I seize?

Traditionally only funds belonging to a Virtual Asset Service Providers (VASP, aka “Exchange”) can be seized. In addition, only the percentage of funds stemming from your original transaction to the scammer can be seized in the VASP wallet. That is why choosing the right Cryptocurrency Tracing company is so important. That portion of your original funds present in the VASP wallet must be known before attempting to seize the VASP wallet. The method used by the FBI, and also CARE, is known as Proceeds-in-First-Out (PIFO). In the years I received Private Sector Tracing company reports for my FBI investigation, this PIFO analysis was never done which is why I could not use them.

What is a hot wallet?

Please do not get excited about large amounts of funds found in VASP “hot wallet”. The hot wallet belongs to the VASP and is generally used to take over cryptocurrency assets from their clients in exchange for fiat currency or something similar. The assets found in those addresses belong to the VASP and cannot be seized. Typically, the address sending the funds to the “hot wallet” is the actual client of the VASP who received your stolen funds so those addresses can be seized.

Can I conduct my own Trace?

The answer is yes. Free sites like etherscan.io and blockchain.com, amongst others, allow you to conduct a trace of your stolen funds. However, these free sites are extremely limited in their capability. They contain very little intelligence tying addresses to VASPs, Decentralized Exchanges (DeXTs), Bridges, or other services. Without this knowledge, it makes it extremely hard to complete an accurate trace. CARE uses state-of-the-art cryptocurrency tracing software to trace your stolen funds in order to prepare an accurate, court approved trace.

Can I seize funds from any address containing my stolen funds?

The answer is no. Wallets are either Custodial or Non-Custodial which describes who possesses the private keys for the cryptocurrency wallet. For a Non-Custodial wallet, only the account holder has the private keys. Without the private keys, nobody can transact (or seize) the Non-Custodial wallets. Custodial wallets are different in that the owners of the accounts have the private keys but so does the VASP. When a VASP receives a seizure warrant, they use their own private keys to move the funds (seize) from the Custodial Wallet to a law enforcement cold wallet to which only law enforcement has the key.

What can CARE do with Non-Custodial wallets?

Since funds cannot be seized from Non-Custodial wallets, CARE places alerts on those addresses containing your funds which alerts CARE immediately if funds move in or out. CARE will carefully watch your funds until they move to a VASP where they can be seized.