CRYPTO ASSET RECOVERY - Crypto Legal

We have extensive experience in helping victims of cryptocurrency theft.

Crypto Legal provides a comprehensive suite of asset recovery services, drawing on extensive expertise in complex, multi-jurisdictional cases. Each case is led by a Cryptocurrency Tracing Certified Examiner (CTCE™️) and a Certified Compliance Professional in Cryptocurrency Financial Crimes (CCPC™️), ensuring a high standard of proficiency. Our team is well-equipped to tackle fraud cases, particularly those involving exchanges and crypto wallets in theft incidents.

Clients may seek our asset recovery services for a variety of reasons, including but not limited to:

•Investment scams

•Sharing private keys or seed phrases

•Malicious smart contracts

•Bitcoin-stealing malware

•Fake crypto wallets

•Theft by hacking

•Crypto phishing

•SIM swapping

•Pump and dump schemes

•DeFi platform exploits

•Ransomware attacks

•Exit scams by fraudulent exchanges

•Ponzi schemes

•Identity theft related to crypto accounts

•Social engineering attacks

We are committed to guiding our clients through the asset recovery process, employing advanced techniques to reclaim lost or stolen assets effectively.

BACKGROUND

Crypto assets are recognised as property under UK law and are subject to regulation by the Financial Services and Markets Act 2023. This Act, which received Royal Assent on 29 June 2023, integrates crypto assets into the existing financial regulatory framework, classifying them as investments and thereby subjecting them to regulated activities and financial promotions orders. Furthermore, the recently enacted Property Bill, passed in September 2024, reinforces the legal status of digital assets, offering clear guidelines for their ownership and treatment.

Regulatory Framework:

Financial Services and Markets Act 2023: This Act extends the provisions of the Financial Services and Markets Act 2000 to include crypto assets, defining them as “investments” that necessitate authorisation from the Financial Conduct Authority (FCA) to conduct regulated activities. It also establishes a regulatory regime for Digital Settlement Assets (DSAs), enhancing consumer protection by addressing risks related to crypto asset volatility.

Property Bill (Digital Assets): Enacted in September 2024, this Bill aligns digital assets more closely with traditional property laws, ensuring comprehensive legal protections for owners of crypto assets.

Engaging a UK-based firm for crypto asset recovery allows you to utilise these robust legal frameworks to secure your rights and entitlements similarly to traditional property ownership. Moreover, under UK regulations, you may be eligible to recover legal fees incurred due to fraudulent activities involving companies linked to your crypto assets. This entitlement arises from the protective measures embedded within these legislative frameworks, ensuring clarity and accuracy regarding the legal status of crypto assets in the UK.

ASSET RECOVERY CHALLENGES

In cases where the identity of a potential defendant is unknown, the principle of “persons unknown” jurisdiction in the UK, akin to the John/Jane Doe jurisdiction in the US, allows claimants to seek interim relief against defined categories of unknown individuals. This includes owners of wallets that have received stolen funds.

Claimants can obtain court orders facilitating the discovery of a fraudster’s identity. The English courts have actively employed Norwich Pharmacal Orders (NPOs) and Bankers Trust Orders (BTOs) to compel third parties, such as cryptocurrency exchanges, to disclose information that may identify unknown wallet holders who received misappropriated funds.

Notably, as of 1 October 2022, a new civil procedure gateway was established under CPR PD 6B Para 3.1(25), streamlining the process for obtaining information orders against parties outside the jurisdiction. This mechanism allows claimants to seek disclosure regarding (a) the identity of a defendant and (b) the whereabouts of their misappropriated property without the need for expensive preliminary court proceedings.

Our primary focus is not on prosecuting fraudsters or engaging in protracted litigation, as these processes can be time-consuming and costly, particularly when dealing with perpetrators located in distant jurisdictions, necessitating the involvement of multiple legal representatives. Instead, we prioritise the tracing, identification, and seizure of misappropriated assets. This objective is attainable irrespective of the fraudsters’ location or identity, thereby ensuring a more efficient and cost-effective approach to asset recovery.

OUR CLIENTS

We represent a diverse range of clients in crypto asset recovery cases, including individual investors and corporate entities.

In response to the high demand for our services, we focus exclusively on cases involving financial losses of £20,000 or more.

Our services are offered through a flat fee model that encompasses both forensic and legal assistance. This approach ensures our clients have complete clarity regarding the costs from the outset, with no hidden fees. Our commitment to transparency is integral to our process, providing a competitive and cost-effective solution for our clients. In addition to the retainer, we charge a modest success fee on any funds successfully recovered.

CONCLUSION

While cryptocurrencies are fundamentally decentralised, most virtual currencies remain traceable. Digital assets are stored in wallets, and every transaction between wallets is permanently recorded on the blockchain, creating a transparent ledger of activity.

Our expert forensic team employs advanced technology to track cryptocurrency movements across the blockchain. By identifying the flow of assets to specific exchanges and flagging suspicious transactions, we can effectively pinpoint potential wallet owners. Once the assets are located, our experienced legal team takes prompt action, submitting formal requests to freeze assets to exchanges and collaborating closely with law enforcement agencies to facilitate asset seizure.

Our comprehensive approach seamlessly integrates technical expertise with legal acumen, bolstered by strong partnerships with exchanges and authorities. This enables us to enhance your chances of recovering hacked or stolen cryptocurrency assets. Do not allow cybercriminals to exploit the perceived anonymity of cryptocurrencies—contact us today to begin your asset recovery journey.

Our Process

1. Letter Before Action (Fraud Cases)

A Letter Before Action will be issued to the parties involved, urgently demanding the return of misappropriated crypto assets. This letter serves as the final notice before commencing legal proceedings. Should the parties choose to comply, we will carefully draft a discharge agreement that formalises their commitment to full reimbursement. In return, we will agree to refrain from pursuing legal action, thereby facilitating an opportunity for a mutually acceptable resolution.

2. Forensic Analysis

A thorough forensic analysis of your loss is conducted, and a comprehensive crypto tracing report is prepared. We trace, locate, and flag the stolen assets.

Our forensic team produces a detailed crypto tracing report and analyses the transactions to uncover valuable information related to your case. We examine behavioural patterns, the origins and current status of the cryptocurrency in question, identify the parties involved, and assess indicators of fraud, dark market interactions, money laundering, and more, providing actionable insights and information.

Our top priority is to trace and identify both the individual responsible for the theft of your funds and the exchange currently holding your assets or facilitating the conversion of your cryptocurrency into fiat currency.

3. Legal Action

Once we have successfully identified both the exchange involved and the perpetrator responsible for the theft, our next crucial step is to collaborate closely with law enforcement in the jurisdiction where the crime was committed. Together, we will work towards issuing a subpoena to obtain the culprit’s KYC (Know Your Customer) documents, enabling us to freeze and seize their assets while taking appropriate legal action. Our legal team will prepare the necessary legal requests to freeze the misappropriated assets, even if they have been converted to fiat currencies and withdrawn to international bank accounts.

Depending on the jurisdiction, law enforcement agencies may require the involvement of a legal practitioner to submit a Suspicious Activity Report (SAR) or Suspicious Transaction Report (STR) on your behalf. Entities such as exchanges, crypto wallets, website hosting services, and international banks typically necessitate a formal legal request to disclose any information. This request must come from a lawyer with the authority to collect the data required for a legitimate investigation or legal proceeding.

Our approach ensures you avoid the expense of hiring additional lawyers across multiple jurisdictions, which can be prohibitively costly, particularly given that misappropriated funds often traverse various exchanges worldwide.

Expert Guidance

Our consultants excel in balancing the presentation of complex technical findings related to emerging cryptocurrency issues with clear communication tailored for non-technical audiences. We provide forensic reports and opinions that are both accessible and impactful.

Data Protection

Data security is a fundamental aspect of our operations. We handle highly sensitive information, which necessitates robust data protection measures. We are committed to helping our clients maximise the value of their data while addressing global data privacy requirements and proactively mitigating security risks. Safeguarding client information is paramount, especially when their future is at stake.

We Take Care

We recognise that pursuing a cryptocurrency fraud case can be a stressful experience, particularly when dealing with the emotional consequences of being a victim. That is why we keep you informed about the status of your case at every step. By removing jargon from the process, we strive to make everything as straightforward and stress-free as possible.