These days, first the cold wallet of the exchange bybit was stolen by North Korean hackers for 1.4 billion US dollars, and yesterday Web3 Yu'ebao Infini was stolen for 50 million US dollars. The occurrence of currency thefts one after another has made many cryptocurrency investors very worried about the security of encrypted assets. The cryptocurrency industry is a high-risk and high-return industry. As an ordinary cryptocurrency investor, how can you recover the loss if your encrypted assets are stolen?
Tracing the flow of stolen funds on the chain
1. Locate the cause of the theft and quickly transfer the remaining assets
After discovering that the encrypted assets have been stolen, the first thing to do is to locate whether the theft was caused by the leakage of the mnemonic private key on the Internet, the use of a fake phishing wallet, or the clicking of a phishing link, etc.
Inventory the assets on the chain and quickly transfer large assets to the wallet address in the security device. If you are not prepared, you can give priority to recharging back to the exchange account.
After all, the technical capabilities of the security team of the large exchange are still trustworthy. As long as the user keeps his account password and sets up Google verification, many risks can be avoided. Even if there is a security incident like bybit where the cold wallet of an exchange is stolen, the risk resistance of a large exchange is much stronger than that of an individual. Users become creditors of the exchange. As long as the exchange is not run and closed, they can slowly make up for the asset gap of the stolen coins by earning handling fees.
So my personal opinion: For ordinary investors in the currency circle, storing in the head exchange is the best way to keep encrypted assets.
2. Sort out the stolen funds chain
The clear and traceable flow of assets on the chain is a technical feature of the blockchain. Therefore, after the encrypted assets are stolen, the subsequent flow of the stolen encrypted assets can be tracked through the blockchain browser and other on-chain data analysis tools, so that a fund chain diagram with the stolen address as the starting point can be sorted out. The link diagram can be used as a clue material for subsequent reporting and handed over to law enforcement agencies to assist in investigation and evidence collection.
3. Request the exchange to temporarily freeze the stolen assets
The stolen funds may be charged into the centralized exchange account during the subsequent on-chain transfer process. You can contact the exchange customer service or key account manager to freeze the inflow account.
However, this method is only a temporary measure that can delay the transfer of stolen funds. If you want to recover losses through freezing, the public security organs still need to file a case and send a freezing cooperation document to the exchange.
Call the police and file a case, and request assistance from law enforcement agencies
1. In the case of currency theft, calling the police may not necessarily recover the stolen assets, but it will be difficult to recover them if you do not call the police and file a case.
Because the exchange does not have the right to dispose of the encrypted assets in the user's account at will, only when the law enforcement agency sends the freezing and investigation documents to the exchange in accordance with relevant laws and regulations, can the exchange freeze the account involved, and subsequently transfer the assets of the users involved in the case according to the court judgment documents.
Therefore, the key to recovering losses is to call the police and file a case, and request the law enforcement agency to coordinate with the exchange to cooperate in the investigation.
2. When encountering criminal cases involving currency in China, it is often difficult to file a case. Choosing appropriate jurisdiction and preparing sufficient criminal complaint materials are the key to determining whether it can go smoothly.
Currency-related cases will have different internal policies in different regions, and the jurisdiction of cybercrime is relatively broad, so it is necessary to choose the appropriate jurisdiction to file a case according to the circumstances of the case.
In addition, the police officers in public security organs in many regions have different understandings and investigative technical means of currency-related cases. Before reporting a case, it is necessary to prepare criminal complaints, retrieved similar cases, on-chain capital chain diagrams and other reporting materials.
What to do if the public security organ does not file a case
In judicial practice, during the process of reporting criminal cases involving currency, victims are often told by the police that virtual currency is illegal and unprotected, or even that currency speculation is illegal, and are discouraged by other excuses.
The normal process is that the on-duty police prepare an "interrogation record" for the accuser after receiving the call. If the report materials need to be submitted, the accuser signs and submits them, and signs the "Evidence Material Receipt".
The public security organ will issue a "Case Acceptance Receipt". The written "Case Acceptance Receipt" is the proof that the public security organ has formally accepted the case, and it is also the basis for the accuser to claim his rights later.
According to the law, the public security organ's criminal case filing review period shall not exceed 3 days in principle; if the suspected criminal clues need to be verified, the case filing review period shall not exceed 7 days; for major, difficult and complicated cases, it may be extended to 30 days with the approval of the head of the public security organ at or above the county level.
During the review period, if you get the "Case Filing Notice", it proves that the case is successfully filed. The public security organ can issue relevant freezing and investigation documents to the centralized exchange or institution, freeze the account into which the stolen crypto assets flow, arrest the criminal suspect, and protect rights and recover losses through subsequent legal procedures.
If you get the "Notice of Non-filing of a Case", you can apply for reconsideration and review to the public security organ, or apply to the procuratorate for case filing supervision, and strive to file a case through these relief channels.
In judicial practice, it is relatively difficult to prosecute criminal cases of stealing and defrauding coins, and various obstacles may be encountered. For ordinary cryptocurrency investors, if they encounter similar cases, it is recommended to consult security companies and professional lawyers, and proceed after listening to opinions from multiple parties.
In addition, there are currently a variety of crypto asset recovery teams on the market, and investors need to carefully identify them, and don't be greedy for small profits and be deceived again.
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