A Liverpool-based crypto investigations team claims to have traced more than £350m of stolen cryptocurrency worldwide.
According to City of London Police, £649m was lost to investment fraud in the UK last year, with cryptocurrency featuring in 66% of complaints.
Crypto transactions are notoriously hard to trace due to the international nature of the industry, the speed at which crypto can be moved and the pseudonymity of blockchain technology.
In addition there are numerous services which are used predominantly by thieves to hide the flow of crypto such as bridges – which move assets from one blockchain to another – and mixers which literally mix up one lot of assets with another in order to hide their destination.
Many investors have lost small fortunes when making mistakes and scammers are cashing in. However a new team of investigators from CEL Solicitors is actively pursuing criminals, tracing millions for victims of cryptocurrency fraud and working to prevent future scams by identifying and unmasking fraudsters.
“Cryptocurrency has been revolutionary in the finance market, but it has become a widespread if not the dominant tool for financial scammers,” said Ryan Sweetnam, director of crypto fraud at CEL Solicitors.
“We specialise in tracing complex cryptocurrency transactions, across multiple blockchains in various jurisdictions and working with law enforcement to try and identify the final destination of stolen assets, as well the identity of the scammer involved.
“We can trace crypto around the world, meaning we regularly work for international clients and with international crypto exchanges.”
The team – made up of blockchain analysts, legal professionals and financial crime specialists – was established in October and has already traced more than £350m worth of stolen cryptoassets around the world.
Using technology including Chainalysis Reactor Software, the investigators trace assets and regularly appear before the UK Civil Courts in seeking comprehensive disclosure orders and freezing injunctions to prevent scammers from moving the stolen assets.
Sweetnam warns there are many complex scams in the cryptocurrency market and investors need to be cautious.
He said: “Similarly with other examples of fraud, criminals are always reinventing tricks and using more and more complex approaches to scam victims including the use of AI which can be a significant complicating factor.”
“Recently there has been a large influx of ‘rug pull’ scams also known as pump and dump scams, where crypto developers create new assets and coins, inflate the price by way of social media groups to attract investments, then suddenly sell off the assets plunging the market price and leading all of the investors into significant losses.”
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