Every year, millions of dollars’ worth of Bitcoin are taken. Read this article first if you’re a victim of Bitcoin theft or a fraud.
I’ll explain why every “stolen Bitcoin recovery” service is a fraud and what you should do instead.
Can a Bitcoin recovery service assist me in restoring my lost Bitcoin, Ethereum, etc.?
You should first and foremost be aware that it is impossible to reverse confirmed Bitcoin/cryptocurrency transfers. On the Blockchain, a transaction cannot be undone once it has been verified. Overcoming this obstacle relies on a robust blockchain analytics report clearly setting out the context of the fraud (an expertise only few has access to)
Avoid “Bitcoin recovery” frauds.
Many “Bitcoin recovery” services make the bold claim that they can retrieve stolen Bitcoin. They will explain how they do this in a variety of ways.
The most widely used recovery techniques are refuted as follows:
Lawyers:
What they promise: We will pursue criminal charges against thieves and require them to give over stolen property (Bitcoin)
Why it won’t function:
You will almost never be able to identify the individuals who took your Bitcoin. It is extremely difficult to determine who the actual owner of a particular Bitcoin address is.
Even if you have someone’s name, email address, “registered trading account,” website, etc., it will be very challenging to get the authorities to help you find out who they really are in real life.
Theft on a “small scale” is unimportant to the authorities. The perpetrators will typically be in a different nation than you. There is also no paper record to follow, unlike with cash. Hacking is not given the same weight as the theft of tangible products because bitcoin and other cryptocurrencies are typically regarded as “property” rather than money. Authorities are less apt to pursue cases as a result of all this.
Bitcoin is rarely returned, even when the criminals’ identities are unquestionably known. The only instances of Bitcoin being found after a crime have been in class-action lawsuits (such as with Mt Gox). Even then, it typically takes many years, tens of millions of dollars in stolen property, thousands of victims, and costly legal counsel.
I’m not saying it can’t be done. Just don’t expect anything helpful to happen if you send a random lawyer $5,000–$10,000 (typical “recovery” fees). It is a scam.
Ethics-based hacking
What they guarantee is that they will hack the criminals in order to get your Bitcoin back.
Why it simply can’t work:
First off, any hacker skilled enough to steal your money is already a threat. The majority of “hackers” prey on non-technical people. The methods used by so-called “ethical hackers” are likely known to anyone who is capable of taking your Bitcoin.
Second, using an email address or a bitcoin address to determine someone’s genuine identify is really difficult. What hope does the $1000 hacker have if the US government can’t figure out who runs the darknet markets?
Third, even a “ethical hacker” has to access another person’s networks, which likely involves breaking the law (unless there is a fraud analyst on board).
More practical impediments can include hiring a legal team of fraud analysts, cryptographers and forensic experts. However, victims of cryptocurrency fraud are not always able to fund complex recovery actions, and so funding for professionals working on an ‘at risk’ basis may be required, or a combination of both.
Bitcoin hackers:
What they promise: In order to undo the transaction and recover your Bitcoin, we will hack Bitcoin or brute force your private key.
Why it won’t work:
Almost $700 billion is the market capitalization of bitcoin. Every Bitcoin transaction and address is visible to everyone. They wouldn’t be assisting you if they could steal or reverse a Bitcoin transaction. They would target the most valuable Bitcoin wallets, which are worth tens of billions of dollars. Of course, the exploit would either be fixed or Bitcoin would lose all of its value once it was known that it could be hacked.
No matter how smart they think they are, it’s a scam.
Chainalysis
What they promise: We will track down any Bitcoin transactions and demand a money-back guarantee from the service that is holding them.
Why it won’t work:
Chainalysis actually occurs. Businesses that maintain records of addresses used by illegal gambling websites and criminals assist exchanges in banning those users. They regrettably can’t assist you for the following reasons:
First off, they have more expensive items for enterprises and governments available to them than the random recovery service you found online.
Second, all they can do is determine which significant exchange or company received your Bitcoin. In order to identify the consumer who made the deposit at this stage, you would require the exchange’s assistance. Without a court order, which is as previously said, almost hard to get, that cooperation cannot be obtained. Additionally, since cooperative exchanges demand KYC, robbers never use them in the first place. If they want to withdraw money, they will probably utilize a less respected provider in a nation that doesn’t work closely with your government.
Subsequently, it’s impossible to track what a specific client does with your cryptocurrency after it enters an exchange. You will never be aware of a person’s withdrawals or transfers of Bitcoin if they merely deposit it with an exchange. As exchanges pool all of their funds, whoever seeks a withdrawal first will receive your stolen Bitcoin as a result. The depositor will not be able to withdraw it.
Fourth, exchanges are not where thieves store their Bitcoin. My experience has been that they either hold onto it for a long time or instantly cash it out. Regardless of how unlikely it is, they will not keep it in a place where it can be seized.
It is a fraud.
Conclusion:
It is really difficult to get your stolen cryptocurrency back. Don’t waste any more of your money.
Are I mistaken? Are there any “recovery” techniques I missed? Let me know in the space below.
So what do I need to do?
The first caveat is that you can reclaim any tokens that are still in your Ethereum address.
Second, you need to move your bitcoins right away to a new private wallet if your bitcoin keys, logins, seeds, etc. have been exposed or leaked but have not yet been stolen.
Third, be aware that you can still be at risk of theft if someone has stolen your Bitcoin. Most likely, you broke the law or were taken advantage of by someone who could do it again.
Avoid purchasing additional Bitcoin. To figure out how it was taken, a security audit must be done. You might have a root exploit that lets someone access all of your data or a keylogger that records everything you type. Become informed. Find out about the most typical bitcoin frauds. Read our essay on how to restore stolen coins from Crypto Fraud at the very least.
Fourth, confirm that your cryptocurrency was truly taken. On a date or at a time when you did not make any transactions, you should see a transaction to an address that does not belong to you. If you’re unsure, get assistance. You’re doing something incorrect if there isn’t an outgoing transaction, which means it was probably not stolen.
Fifth, see if the BCH/BSV forks have been claimed if your Bitcoin was stolen and you had it before August 2017. Do this right away, before the thieves do.