With the rise in value of digital assets such as Bitcoin, along with the whispers across the globe about regulatory plans for cryptocurrency; this creates a new landscape of risk and criminality that our clients need to manage. However, with each crypto crime, there will almost certainly be a need to trace digital assets across the blockchain.
Putting together an evidential package quickly to freeze a digital wallet gives you the best chance of recovering stolen funds before they are lost. By teaming up with our professional investigators with expertise in both tracing cryptocurrency and putting together a strong case, you maximise your chances of a positive result.
For each cryptocurrency investigation, a typical investigative strategy may consist of:
- Gathering and analysing traditional evidence such as witness statements, documents, access control logs, and open source intelligence (OSINT) on individuals of concern.
- Using specialist analytical tools, we aim to identify wallets that the funds are moving through and map these out in a visual, easy to understand diagram.
- Tracing the transactions through the blockchain to exchange services.
- Assessing from an intelligence perspective where, how, and how much is being ‘cashed out’.
- Actively monitoring wallets that contained stolen funds so that our specialist investigators were immediately informed about any new inbound or outbound transactions.
We were the lead investigators in the landmark judgement in the case of ‘Duncan Johns and Ion Science v Persons Unknown’.
Following our robust investigation that allowed us to identify the exchange services, and the creation of comprehensive case bundles, we liaised with a specialist law firm and external counsel to lay out the facts.
The legal team agreed that there was sufficient evidence to apply for Disclosure Orders and International Freezing Orders at the UK Commercial Courts and both orders were granted by the judge. This resulted in the total loss, and more, being frozen in the fraudster's wallet.
The significance of this case
In the world of cryptocurrency fraud and asset recovery, this investigation is considered to be a landmark case for the following reasons:
- It is believed to be the first ICO fraud case to go before the Commercial Court.
- It is one of the only cases where the court has granted to serve a free-standing Bankers Trust order out of the jurisdiction against cryptocurrency exchanges.
- This is the first time that the court has considered the lex situs (location) of Bitcoin.