The answer is yes and no. As the U.S.'s recent recovery of some of the cryptocurrency paid to the Colonial Pipeline ransomware hackers, it is possible to get crypto back — but for the average crypto holder, it can be an extremely difficult process. Here's what you need to know.
Hiring a professional recovery service is the best way to go when your crypto has been stolen from your wallet. There are several companies that specialize in recovering lost cryptocurrency funds but be aware that these services can be expensive.
Blockchain analytics and investigation techniques
Blockchain analysis is essential for retrieving Bitcoin that has been stolen. These methods and technologies aid in tracing the movement of money, locating addresses connected to the fraud, and spotting erroneous transactions.
Bitcoin, contrary to popular belief, is traceable. While your identity is not directly linked to your Bitcoin address, all transactions are public and recorded on the blockchain. So, while your name is not attached to your address, your address is attached to your transaction history.
If your cryptocurrency has been stolen or scammed, a powerful technique known as crypto tracing can be used to identify target transactions and locate assets. Whether to inform a financial crime investigation or assist an asset search, IFW offers exceptional crypto tracing services across the globe.
Contact your bank immediately to let them know what's happened and ask if you can get a refund. Most banks should reimburse you if you've transferred money to someone because of a scam.
If they find that fraud did indeed occur, they are obligated to refund the cardholder. If the bank needs more time to investigate, they can take up to 45 days, but they must at least temporarily return the funds to the cardholder's account by the 10-day deadline.
Banks hire personnel, such as internal credit fraud investigators, who use electronic transaction trails and account-based rules to determine the origin of fraudulent transactions.
Do banks reimburse stolen money? Banks often reimburse stolen money, but there are some exceptions. Transactions not made by you or anyone authorized to use your account are fraudulent, and federal law protects your money.
At the basis of cryptocurrencies like Bitcoin (BTC) stands blockchain technology. A fundamental characteristic of blockchain technology is transparency, meaning that anyone, including the government, can observe all cryptocurrency transactions conducted via that blockchain.
Report the scam
Crypto scams are new and any information you give will be very valuable in helping limit the activities of these scammers. You can also report the scam as a cybercrime at the Australian government's website at https://www.cyber.gov.au/acsc/report.
Cryptocurrency scams are deductible by filing the loss on Form 8949, which is then reported on IRS Form 1040, Schedule D.
Approaches to dealing with stolen virtual currency
Call your bank - If the transaction had related costs that hit your bank account - such as transaction fees or deposits - then contact your bank immediately and let them know it is an unauthorised/fraudulent transaction.
A Bitcoin address by itself is not traceable, as there is no identifying information stored directly on the blockchain. But there are ways that the identity of an individual can be linked to specific wallets they own and transactions they have made. This is why Bitcoin is not anonymous — it's pseudonymous.
Are Bitcoin transactions traceable? Since Bitcoin uses blockchain technology, there is complete transparency, and all the transactions are recorded on a distributed ledger. These ledgers are open to the public, and anyone can access them. This makes Bitcoin transactions traceable.
When you've been scammed. If you have sent money or shared your banking details with a scammer, contact your financial institution immediately. They may be able to stop a transaction or close your account to protect you from further loss. Your credit card provider may be able to chargeback any fraudulent transactions.
Once filed, your dispute is then turned over to the bank or card network for investigation. Your bank will typically give you a provisional refund, which will be in place until your claim can be validated by the bank.
Contact your bank or card provider to alert them. Reporting is an important first step to getting your money back, and you could be liable for all money lost before you report it. If you've been targeted, even if you don't fall victim, you can report it to Action Fraud.