One of the most common questions that arise after being the victim of cryptocurrency theft is, will I ever get my money back? Crypto is still new, and there are many questions about recovering stolen crypto. The number of cryptocurrency-related scams is also rising. However, thanks to blockchain technology, it’s possible to track down those who stole your crypto and recover it.
What are cryptocurrencies
You can’t hold it in your hand, but cryptocurrency is real money. Unlike conventional cash, cryptocurrency is digital and not controlled by any government or bank. It’s also anonymous and doesn’t use physical notes – so what exactly is cryptocurrency? And how does it work? Can you recover stolen crypto?
Are cryptocurrency wallets safe
Cryptocurrency holds value like any monetary asset, and it’s essential to protect it. Many people keep their crypto in digital wallets on a trading platform, like Coinbase or Robinhood. You can also hold your crypto on hardware wallets if you use other exchanges. A hardware wallet is an offline device that stores public and private keys. Since they are offline, a hardware wallet isn’t vulnerable to online attacks that steal or alter digital information. In other words, only someone with physical access to your hardware wallet can steal or change its data. Online hackers won’t be able to do so. So it’s one way to avoid your crypto assets from being stolen. If you have a hardware wallet, you should be sure never to lose your password. Losing the password to your wallet would lose you access to the assets in it.
The blockchain is traceable
Yes, blockchain technology assigns a unique ‘hash’ to each crypto block. Hashes work like a fingerprint, and each one is unique to the crypto contained in each block. The blockchain ledger uses hashes to track every cryptocurrency transaction- this is how NFTs also follow ownership history. So, following the blockchain, authorities can help recover your stolen crypto. In theory, it’s possible to change the hash of a block after it is complete. However, doing so would require a lot of computing power and technical skills. And even then, because the blockchain is constantly updating its network, it would overwrite the changes and still trace any transactions.
If my exchange is hacked, will I lose my crypto?
For example, let’s say you sent a certain amount of ether to an exchange. That exchange then stored your ETH in their hot wallet, which can sometimes be vulnerable to hackers. The hackers could gain access to that wallet and transfer it somewhere else. Some exchanges may have insurance policies to reimburse customers who experience something like that. If not, though, they might still be able to track down where those funds ended up going and help authorities go after whoever took them. So even with hacker incidents, the blockchain’s technology makes it possible to recover stolen crypto.
Is there anything that can be done if your crypto is stolen
Until now, most people who have their crypto stolen never got it back. If you have crypto, like anything else of value that you own, take care not to let it be accessible by others in an insecure manner. Authorities are getting up to speed with the technology and starting to turn things around. And because of the transparency of blockchain technology, authorities can confirm which stolen assets belong to each victim in large-scale fraud schemes. So you can recover stolen crypto even if scammers or hackers store it in an offline wallet. Once the culprits are caught, the blockchain can lead authorities to stolen assets’ original owners.
By Diego Ferragut and David Grasso
