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Cryptocurrency Tracing: the What, the how & the why

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Cybertrace Team

August 10, 2022 · 6 min read

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With crypto fraud and hacking on the rise, cryptocurrency tracing or blockchain tracing (i.e. trace Bitcoin, etc.) has become a vital tool in the fight against scammers. Contrary to popular belief, cryptocurrencies such as Bitcoin, Ether, and Tether are neither untraceable nor completely anonymous. Cybertrace has successfully completed hundreds of crypto fraud investigations since expanding its operations in 2020 to include cryptocurrency tracing. Boasting a 97% success rate for Bitcoin traces, and only slightly less for other cryptocurrencies, our experienced crypto fraud investigators play a vital role in fighting cybercrime. But what is cryptocurrency tracing? How does it work? And, why is it important for crypto fraud investigations and finding my bitcoin or other cryptocurrencies?

Why is cryptocurrency tracing important in crypto fraud cases?

Find my Bitcoin. Cryptocurrency tracing is vital as investment fraud and theft via the blockchain by hacking are on a steep rise, hurting thousands of victims. In 2021, crypto fraudsters grabbed a record $14 billion globally, while crypto theft increased fivefold to 3.2 billion year-on-year. As more and more people invest in blockchain assets (cryptocurrencies) such as Bitcoin, Ether, or Tether, scammers are having a field day. They set up fraudulent websites, lure victims with too-good-to-be-true promises and then scam them out of their precious savings. Before they know it, thousands and thousands of dollars have disappeared, leaving finances ruined and lives devastated. With police overwhelmed by the sheer scale of crypto fraud, the work of private professional cryptocurrency tracers is of crucial importance. We need to hold criminals to account and have the capacity to find your stolen crypto across various blockchains!

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Isn’t crypto anonymous and untraceable?

While cryptocurrency transactions on the blockchain are anonymous, the points at which offenders “cash out” their crypto are not. As their name suggests, cryptocurrency exchanges allow the swapping of cryptocurrency for fiat currency, such as U.S. or Australian Dollars. Importantly, Know Your Customer (KYC) and Anti-Money Laundering (AML) obligations require most exchanges to verify and keep records of their clients’ identity. This may include the user’s name, telephone number, email address, identification documents and IP address. What this means is that, if you can pinpoint the wallet where the stolen funds are cashed out, and the exchange that hosts said wallet, you can set the asset recovery process in motion. But first, how does the actual cryptocurrency tracing work?

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So how does Cybertrace find my stolen crypto?

The art of finding my bitcoin and other cryptocurrencies.

The goal of cryptocurrency tracing is to identify the receiving wallet address and the exchange that hosts it. During an initial consultation, a team member will gather all relevant information from each client required to conduct cryptocurrency tracing. This usually includes wallet addresses and transaction IDs as well as the amounts of cryptocurrency transferred. One of our Cryptocurrency Tracing Certified Examiners (CTCE) will then make an initial assessment and determine which transactions to trace. The primary goal is to identify the offenders, rather than to locate 100% of the funds.

Next, our CTCEs utilize a highly sophisticated tracing software to trace the client’s funds through a maze of transactions across the blockchain. Using the same software as some of the world’s leading law enforcement agencies, our analysts’ experience and investigative skillset are crucial. They follow transactions from one wallet address to another to eventually find the cash-out exchange. While tracing, they have to notice suspicious patterns, ignore decoys and look for links to criminal enterprises, dark markets, gambling sites and high-risk exchanges. It takes significant expertise, time and money to successfully trace cryptocurrencies across various blockchains, but the good news is: it can be done. In fact, Cybertrace has an impressive 97% success rate for Bitcoin traces, and only slightly less (90-95%) for other cryptocurrencies.

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Say you found where my stolen crypto is. How do you know who is behind it?

Find my Bitcoin

Cryptocurrency tracing is the first and vital step in a three-part process to help scam victims recover their funds. Without it, nothing else can happen. Once our CTCE has identified the correct blockchain, traced the crypto, and identified the offender’s wallet address, the next step is to find out who owns the wallet. Some exchanges will cooperate with a request from Cybertrace to release information about wallet holders suspected of fraud/theft. If cryptocurrency tracing identifies such an exchange, our analysts will make a request to the exchange on your behalf.

In most cases, however, exchanges will require the police to request important records which identify the account holder. This means clients need to visit their local police station and ask them to email the exchange involved. Since this is a new form of crime, police responses vary by jurisdiction, police station, and even individual officer. While most of our clients have successfully enlisted the police to request records on their behalf, some have been rejected. In order to maximise your chances, Cybertrace will supply clients with a detailed cryptocurrency tracing report outlining the results. We will also provide draft request letter templates to make the process as seamless as possible for the police.

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How do I get my stolen crypto back?

Once the police have received information identifying the account holder based on Cybertrace’s cryptocurrency tracing, you’re another step closer to recovering your assets. Our experienced investigators may conduct background checks on the offender so that you know who you are dealing with. Furthermore, Cybertrace is able to coordinate the asset recovery process on your behalf or refer you to our specialist partners. However, it’s important to stress that, contrary to the claims of recovery scammers, asset recovery is not a quick fix. Rather, it’s complex and time-consuming as offenders often reside overseas, conceal their whereabouts, and hold up their reckoning in court. Pursuing it requires patience, determination, and access to expert analysts, detectives, and lawyers. Having said that, we have successfully supported many clients to trace their Bitcoin through our in-house expertise and via international partners.

Ok, how do I get started?

If scammers or hackers have stolen your cryptocurrency, start by contacting Cybertrace today for a free and confidential assessment on how to trace Bitcoin / find your bitcoin. Our team will provide frank and honest advice, walk you through your options and support you throughout the entire process. As Australia’s first provider of cryptocurrency tracing services to the public, we have completed hundreds of successful traces. After expanding our domestic business and opening a second office in The Netherlands, we are now taking on clients worldwide. If you have been a victim of cyber fraud, scams, or theft, get some serious expertise on your side. Don’t let the crooks win – contact Cybertrace and take action today!

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4 comments

  • Piotr Pawlowski 1 month ago

    Hello,
    After being persuaded by another seller from temuints.com, Linna’s Corner Cabin, I applied to open an online store on temuints.com. Running the store consisted of paying for the warehouse and then making a profit from the completed order.
    I paid a total of $35,600 and PLN 41,286 to the seller’s wallet. After some problems, he tries to close the store. I have fulfilled all additional conditions imposed on me for the positive closing of the store, which are not included in the regulations, to meet additional conditions, I had to borrow money and fell into a loop of unfair practice. First, a deposit of $3,000 to complete the application to close the store, after which I was informed that my application would be expedited, it turned out to be a payment of $10,000 to quickly close the store. After successfully closing the store, I was informed that the funds had reached my wallet and I could request a withdrawal. I provided my bank account and received a message: The shopping center’s financial department will check my bank account. Then information: please enter the withdrawal amount. Wanting to withdraw almost everything, I ordered $61,000 and asked for confirmation of the transfer, after 5 minutes I received: Financial opinion After checking with the tax office, the tax income of your shopping center account did not meet the standards.
    You now need to pay off the tax verification account amount of $11,590. Please deposit 19% of your account amount within 48 hours to the mall to verify your account. The current amount of funds to be withdrawn in your account is: $61,000. To verify your funds, you need to pay $11,590 to verify your account. Paid verification funds can be withdrawn once verification is completed. Once verification is complete, you can withdraw funds from your account, including the verification funds paid.
    Hello, funds have been withdrawn from your store, but your tax verification has not been reviewed and approved.
    Now you will need to complete a tax verification. Once your tax audit is approved, your $11,590 verified funds will be returned to your store wallet and you can withdraw to your bank account! If you don’t pay verification tax. Your Validation Tax funds will increase by $1,000 every 24 hours
    Hello, you need to purchase an exclusive USDT tax payment verification address.
    Having read the regulations, the current situation was not included anywhere in the regulations.
    Terms and Conditions: Each Party will be responsible for paying its own Taxes under these Terms of Service as required by Applicable Law in its applicable tax jurisdictions.
    However, the regulations state that Banana is authorized, if necessary, to collect the necessary taxes.
    I was prepared for taxes, they have to be paid, but no like this. The above situation led me to a very difficult life situation, borrowing money from family and friends.
    I have screenshots of writing from the service center, online store data and photos of the regulations. I wrote to ask for the regulations to be sent to me, but to no avail. Always no answer.
    Now I check this website every day and there are more people like me. I try to write to them to warn them, but I don’t have no response.
    Is it possible to get acquainted with and intervene in the above matter?
    Yours faithfully
    Piotr Pawlowski

  • Richard Lamoreaux 1 month ago

    My crypto funds were stolen from mt5 after I made trades on the foreign exchange. I was involved with a person that had information on when to buy and when to sell currencies. After I made 1.9 million dollars the money disappeared and so did the conversations. I’m looking for help to recover my stolen funds plus my profits.

  • Clinton reeves 3 weeks ago

    Hi there i have been scammed a couple of time from crypto scams are you acle to helps us ?

    • Cybertrace Team 3 weeks ago

      Hi Clinton,

      Our team has reached out via email.

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