According to a2019 reporton cryptocurrencies by Kaspersky, around 19% of survey respondents said they had been hacked on exchanges, and another 15% said they were victims of cryptocurrency theft.
This means that if you’ve invested in Bitcoin or any otherdigital currency, your savings are a target for cybercriminals. That said, is it possible to recover stolen cryptocurrency if the worst happens?
Recovering stolen cryptocurrency or bitcoin is generally not possible when holding your digital wallet’s private keys. Digital assets are designed for one-way transactions. Unauthorized transactions of stolen funds have the same security as valid ones. Secure practices can prevent future theft.
But do not lose hope. This guide will tell you about the things you can do in case you become a victim, as well as tips on how to prevent fraud in the future.
Why Recovering Stolen Bitcoin & Other Cryptos is Hard
It is quite improbable that you will be able to reclaim your virtual currency once it is stolen. Theoretically, you can follow your stolen crypto by looking at the blockchain, but practically, this is difficult due to the system’s anonymity and the fact that the thief would almost certainly use a bitcoin exchange to convert the currency to fiat immediately.
Yes,most transactions leavea trail that you might be able to trace to get the criminal’s identity. However, even if you successfully trace the details through public ledgers, there are few options for recovering the money because most cryptocurrencies are decentralized.
Determine if Recovery is Worth The Effort
I Was a Victim of a Crypto Scam - S...
Because it is usually very expensive and emotionally draining to try and recover, crypto is good to consider everything before you take that route. It’s a personal decision whether it’s worth the time and effort to hire a professional recovery or just let it go, paying the tuition for learning how to handle/hold crypto correctly. This is particularly true if you haven’t put too much of your investible funds into this asset class.
The following suggestions can help you recover your lost cryptocurrency.
Use a Crypto Recovery Service or Bounty Hunter
There are sites where you can post a bounty if you are ready to pay a reasonable sum to restore your funds. Expert blockchain searchers will look into the theft and determine whether the coins can be recovered for a price. Bitcoin Bounty Hunter and other similar sites are a fantastic place to start. However, these services may be costly, and they frequently do not give any further information beyond what is publicly available.
Blockchain explorers such as Blockcypher may also be used to track the progress of your cash. The site would provide the user’s bitcoin address. Then, the bitcoin address is looked up on http://www.bitcoinwhoswho.com/ to see who owns it.
Other Things That You Can Do To Try and Recover Your Stolen Cryptocurrency
Contact the police
Although a formal complaint is unlikely to aid in the recovery of stolen crypto, having a case number or paperwork isn’t a bad idea. You never know if you’ll be involved in an insurance payout or a lawsuit. If you need to prove your case, having evidence that you took the loss seriously can help.
Notify the cryptocurrency exchange
If you notice that your crypto has been stolen, maybe due to a hacking attempt on your account, you must act promptly. Delaying the tracing procedure may allow the hackers to transfer your money to a cold wallet and then transmit them to other exchanges, obscuring their trail.
Follow the money
In blockchains, transactions leave a‘trail’that can be followed. It is also relatively easy to determine the thief’s wallet address.
You can keep track of the wallet address to which your funds were sent and track their transactions. If the fraudster tries to move the funds from the account to anexchange, immediately notify the cryptocurrency exchange.
On most exchanges, traders must submit KYC (Know Your Customer) data, such as addresses and names, before converting crypto into fiat currency or trade. If you report the case, the platform can help track the scammer. This is another reason why a police report is very important.
Again, blockchain explorers likeBlockcypher can help you follow your funds. The website will give you the criminal’s bitcoin address that can be checked onwww.bitcoinwhoswho.comto determine the owner.
However, keep in mind that this method does not guarantee that you will get your funds back for sure. But you can warn them that you will report to relevant financial authorities.
Call customer service
You’re more likely to receive assistance if your exchange is larger andwell-known. If you act quickly, the exchange may be able to freeze your money, depending on the phase or level of the theft.
However, keep in mind that many exchangers aren’t obligated to assist. Some exchanges are based in nations where cryptocurrencies are subject to few restrictions. Also, some governments do not consider cryptocurrency as an asset, thus decreasing the chances of government assistance.
Tips To Prevent Future Cryptocurrency or Bitcoin Theft
Don’t talk publicly about owning the digital currency.
If a cybercriminal can figure out that you own crypto from your social media account, you are more likely to be targeted. So keep everything to yourself.
Use multi-factor authentication
Make sure that multi-factor authentication is enabled. Go for an authenticator application instead of SMS. If you can disable the SMS authentication option, please do it.
Use a new email address and unique password to set up the crypto account.
It’s preferable to create a new and clean email account that you’ll only use for your virtual currency account. This decreases the chances of your email account being used to target you.
Use a ‘cold or hard wallet.’
Keep your crypto offline in a “cold or hard wallet.” This is not a brand but a concept of storing digital coins off the internet to minimize the chances of hackers stealing through online methods.
Spread your crypto across exchanges
Several exchanges have been hacked. To reduce the effect, diversify your investments between exchanges.
Get secure
Spend some time improving your overall internet security. Use sites like Data Overhaulers to learn about excellent security and how to improve it.
Protect what’s left
If you still have money in your hacked wallet, move it out. Delete the wallet and replace it with a fresh one.
Change any passwords associated with your exchange account as soon as possible. Change your email accounts. If you believe the gadget you used to login intoyour account has been hacked, reformat it or, better yet, stop using it.
