“CoinsMarkets was the source of my first loss. When the exchange closed with our funds, it happened. I made no effort to get in touch with anyone or call the police.
This tweet asked about the lack of recourse people have when their assets are taken in a hack, exit scam, or Ponzi scheme. Many intrepid cryptocurrency investors responded.
According to Pawel Kuskowski, CEO of blockchain sleuthing company Coinfirm, there may be as much as $10 billion worth of stolen cryptocurrency on the market. Additionally, he wants to give victims a chance to recover their money.
Coinfirm has partnered with international investigation firm Kroll, a division of consulting firm Duff & Phelps, as exclusively revealed to CoinDesk. ReclaimCrypto, the joint initiative that has just been unveiled, combines cutting-edge blockchain forensic methods with the more established fields of legal investigation and asset recovery.
According to Kuskowski, there is currently no single location where victims can go to receive assistance. It almost seems as though they are pleading for attention for their situation. In the end, they will have to resolve the issue on their own; consider hiring a lawyer, perhaps in another country.
The amounts that can be recovered vary. For instance, another analytics company, CipherTrace, recently estimated that $4 billion in cryptocurrency has been lost this year. In Kuskowski’s estimation, historical (and unresolved) occurrences like Mt. Gox, which in today’s currency would be worth about $1 billion, are included.
There are success fees assessed on a case-by-case basis, Kuskowski told CoinDesk, adding that they did not undertake this work solely for the benefit of humanity. “Doing the market analysis for this product, we started by calculating the kind of top cases, where we know we could be successful and recover funds, which was about 200 cases,” he said.
The value of just those cases is about $1.5 billion, Kuskowski continued.
What it does
Anti-money laundering (AML) within cryptocurrency networks is the core business of Coinfirm. This is done by examining the transaction history using a variety of smarts and big-data analytics. It works with about 50 exchanges and has amassed a sizable database in this area, much like services like Chainalysis and Elliptic.
The partner of Coinfirm, Kroll, adopts a more “traditional” strategy, which may involve using former FBI and CIA agents to comb the dark web for activity involving stolen funds or presenting court orders to force an internet service provider to disclose information about an IP address.
What Should We Do With Bitcoins That Have Been Stolen?
It should be noted that Kroll is experienced with cryptocurrency: In relation to fraudulent coin offerings, the company collaborated with the U.S. Securities and Exchange Commission (SEC) last year. Additionally, Kroll tells CoinDesk that it assisted in finding the thieves of $27.8 million worth of bitcoin in Europe.
Loss victims may request third-party litigation funding from Kroll if they so choose. This implies that businesses that offer specialized financing to the legal market, like Burford Capital or Therium, will be responsible for paying for people’s legal expenses. They retain about 30% of the money they have recovered for this purpose and give the remaining funds to the victims.
“From a victim’s point of view, where the police have not been able to recover that money, they are not having to spend anything to get something,” Benedict Hamilton, managing director at Kroll, told CoinDesk. Furthermore, no one may recover money on their behalf without their consent. It completely changes the economics of recovering stolen money, which is very exciting.
Hamilton said that Kroll can extend Coinfirm’s role as “a torch shining on the blockchain” into the shadowy corners of the dark web. In Pittsburgh, Pennsylvania, Kroll Cyber manages a specialized darkweb unit under the direction of Keith Wojcieszek, a former leader of the cyber division’s criminal investigations unit of the U.S. Secret Service.
Observe the money
When it comes to a crypto investigation, Hamilton said there are two possible directions to go: identify the perpetrator or follow the money.
Since the client is paying for asset recovery, that is ReclaimCrypto’s main goal in this situation. However, both routes ultimately lead to the same destination, according to Hamilton, who also stated that it is “inevitable” that the investigation would be completed without us providing all the information to the appropriate law enforcement so they could benefit from the work and apprehend the thieves.
While XRP, BCH, LTC, NEO, and DASH will also be discussed, ReclaimCrypto will primarily concentrate on bitcoin and ether. Unlucky people who have lost assets can read more information here.
Some people who have had coins stolen from them continue to view it philosophically. The aforementioned investor remarked, “That’s life,” and continued, “It made me grow a lot and it’s part of my adventure in crypto.”
