It is a well-known fact that cryptoassets are targeted by fraudsters. They consider the possibility of prosecution negligible and the need to return the stolen assets almost non-existent. Indeed, the speed with which the stolen cryptoassets can be moved and converted into cash is positively breathtaking!

How does cryptoasset theft occur?

Perhaps the most common method of theft is through a fake exchange. Usually, a fraudster will contact you to persuade you to invest in cryptoassets. Once you’ve invested, they’ll invite you to register the cryptoassets with a fake exchange. This means that once you transfer your cryptoassets to the fake exchange, the fraudster has control. You will only know about this when you try to log onto the fake exchange and discover that you are locked out.

There are, of course, other ways fraudsters can steal your cryptoassets so you need to always be vigilant.

Why speed is of the essence

The very nature of cryptoassets means they are easy to move quickly. Because they are intangible and transferred electronically, a simple instruction is sufficient to move them from one holder to another. Once someone gains control over the cryptoassets, they can move them to the other side of the world instantly.

Seek specialist legal advice immediately

Simply reporting the theft to the police is unlikely to lead to restoration of your ownership of the stolen cryptoassets in the near term. However, to seek recovery you need to raise civil proceedings. To do that, you will need a solicitor experienced in dealing with cryptoassets.

What kind of remedies might be available?

Cryptoassets are easily transferrable. That means the first thing you need to try to do is to prevent that transmission. The fraudster will likely have transferred the cryptoassets to what they consider to be a safe haven abroad.

The first relief you will need to seek is a worldwide freezing injunction. This will prevent the further transfer of the assets.

You will also seek their recovery or a cash equivalence and, potentially, damages. You may also require information from the banking system if the cryptoassets have been converted to cash and lodged in a bank account.

In tandem with instructing solicitors, you will also need to find out where your cryptoassets have gone.

Tracing the transactions

Despite the common myth that cryptoassets are untraceable, an experienced analyst working in this field will be able to track the assets. This is because each transaction on the blockchain is recorded. Painstaking work will provide the location of the assets.

A summary of the steps you must take if your cryptoassets have been stolen

• Act immediately;
• Report the theft to the police;
• Engage an analyst;
• Instruct a solicitor;

Cryptoasset recovery specialist solicitors

If you wish to recover stolen cryptoassets you should engage a solicitor with a track record of success in this area of law.

The cryptoasset solicitors at Lewis Nedas Law are experts in their field. We can advise on and guide you through all aspects of the recovery of stolen cryptoassets. If you need advice or assistance on any aspect of cryptoassets, please take expert legal advice from Lewis Nedas Law’s crypto asset solicitors.

Blog post by expert crypto asset defence solicitor Siobhain Egan. For expert, trusted legal advice, please telephone us on 020 7387 2032 or complete our online enquiry form.