TLDR — Commercial Cryptoasset Recovery (CAR) services are still in their infancy. While blockchain explorers are available, risk and attribution — also known as off-chain — data is key to understanding any individual case’s odds of recovery. That said, big data analytics, risk and attribution data only get you so far.
Last post, I touched on the blockchain analytics and OSINT required to support an initial evaluation and cryptoasset recovery attempt.
This post will address an important aspect to the recovery process; identifying the right legal support to go after identified criminals in jurisdictions with adequate support for property rights and the rule of law.
- Please note that this is not to be construed as legal advice and that it is a high-level look at one possible legal approach.
Legal Referral – Private Civil Action
Identifying the right legal partner to work through on a cryptoasset recovery case needs to be emphasized; ideally, the firm chosen will have asset recovery experience; understand the legal precedents in successful cryptoasset recovery cases; and the international relationships to further claims in jurisdictions outside of the United States.
These efforts will go far beyond having an attorney write a simple demand letter to an exchange for information regarding one of the offending company’s account holders.
The law firm will need to understand not only civil liability in the US but also local laws in the cryptoasset company’s jurisdiction; how to talk to law enforcement and courts in that jurisdiction to enlist their aid in satisfying the judgment against the offending party; and, where necessary, how to seek local legal redress where US-based judgments are not recognized in any way.
Companies like Evertas will still be a part of this process as the legal team will require court-ready forensic reports and expert testimony to successfully pursue a judgment against an identified party.
While the above is an oversimplification of an extremely complex process, it bears remembering that pursuing the legal option will take time; in my introductory blog post to this series, I mentioned there are many firms working to identify, seek judgments, and attach assets for recovery in the Bernie Madoff case, some eleven years after Madoff plead guilty to running one of the largest Ponzi investment schemes in US history.