Cryptocurrency Investigations
Hudson Intelligence conducts cryptocurrency investigations for law firms, businesses, public agencies, financial advisors, and investors. Our work includes cryptocurrency asset discovery, forensic blockchain analysis, digital asset tracing, fraud and theft investigations, and expert consulting in matters involving digital assets.
Every cryptocurrency investigation is led by a Cryptocurrency Tracing Certified Examiner (CTCE) and Certified Fraud Examiner (CFE).
By combining blockchain intelligence and digital forensic tools with traditional investigative techniques, we identify and trace cryptocurrency assets, analyze exchange and wallet activity, and develop evidence for civil litigation, fraud investigation, financial recovery, and other investigative matters.
Investigations for Financial Recovery
Blockchains, cryptocurrencies and decentralized finance are genuine innovations with potential for positive impact on financial systems. But they are also buzzwords that have been badly abused to promote fraudulent schemes, including investment fraud and illegal market manipulation. The integrity of these new technologies has also been compromised by thefts, breaches, money laundering, ransomware and terrorist financing.
Cryptocurrency investigations are a frontline in the fight against financial crime. Investigations are pursued in coordination with financial recovery efforts by law enforcement and to support civil litigation on behalf of defrauded investors.
Cryptocurrency in Divorce
Contested high-net-worth divorces increasingly involve claims of hidden cryptocurrency, concealed wallets, secret accounts and fraudulent transfers. Expert forensic investigation can locate undisclosed digital holdings and determine their proper value to ensure equitable distribution of all assets of the marital estate and community property.
Crypto Romance Scams
A financially devastating form of relationship-based fraud introduces many first-time investors to the perils of crypto trading. Investors are solicited through a lengthy process of seduction, before being persuaded to send their money to fake trading platforms. Their online portfolios seem to grow and grow with huge profits — until they try to make a withdrawal.
Locating and Identifying Cryptocurrency Assets
A Discovery Guide for Attorneys
Blockchain tracing generally begins with a wallet address, transaction hash, or other piece of blockchain evidence connected to the subject. But in many civil investigations, no such evidence is initially available.
Our three-part series presents a practical investigative approach for attorneys seeking to identify suspected cryptocurrency assets—beginning with traditional bank records, moving through targeted third-party discovery, and ultimately developing the exchange and blockchain evidence needed for forensic analysis.
Explore the Series on Finding Cryptocurrency Assets and Exchange Accounts…
Cryptocurrency Forensics and Asset Tracing
Online frauds, cybercrimes and cryptocurrency schemes may involve fictitious personas and stolen identities, controlled by individuals – or criminal organizations – in multiple countries. Perpetrators may attempt to obfuscate the flow of their funds across the blockchain through peel chains and layering, or launder illicit proceeds through darknet markets and high-risk exchanges.
However, Bitcoin and other crypto coins and tokens are not completely anonymous. Cryptocurrency transactions can be traced by investigators to identify perpetrators and determine the location of misappropriated funds.
Forensic analysis and digital asset tracing are critical parts of many cryptocurrency investigations. They are conducted in support of civil litigation, criminal complaints, regulatory enforcement actions, and financial recovery efforts.
Security Breaches and Theft
Hackers have emptied digital wallets – and company coffers – by exploiting security lapses at cryptocurrency exchanges, software wallet providers, password management tools, cloud-based storage, startups and initial coin offerings. Phishing attacks are used to gain unauthorized access to administrative passwords and private keys. Sophisticated hacks involve SIM swaps and multi-prong exploits.
Ponzi Schemes
Promises of ‘guaranteed profits’ from an Initial Coin Offering (ICO), cloud mining operation or crypto token investment? Promoters of Ponzi schemes solicit investors with big talk about market innovation and insider insights, but instead of placing customer funds in a legitimate investment, they misappropriate the money to line their own pockets.
More About Ponzi Schemes...
Cryptocurrency Basics: Bitcoin and Beyond
Cryptocurrency is a virtual asset with no physical form. Ownership and transfers of cryptocurrency are recorded digitally on a distributed ledger known as a blockchain.
Increased use and adoption of Bitcoin (BTC), Ether (ETH), and other cryptocurrencies, as well as tokens such as Tether (USDT) and USD Coin (USDC), have pushed the value of the cryptocurrency market into the trillions. The market has endured multiple crash-and-recovery cycles, plus a series of billion-dollar bankruptcies, regulatory enforcement actions, and high-profile criminal convictions.
The likelihood of financial recovery from cryptocurrency fraud or cryptocurrency theft can be influenced by multiple factors, including the extent of support from law enforcement and regulatory agencies; operations in foreign jurisdictions; and the feasibility of tracing certain transactions, coins and tokens. Positive identification of perpetrators — and related analysis to attribute cryptocurrency addresses, accounts and activity to identifiable persons or entities — may require subpoenas, warrants, or court orders. Financial restitution may also be contingent on the cooperation of commercial exchanges and virtual asset service providers in multiple countries, depending on the complexity of the crime and technical sophistication of the responsible parties.
Consult an Investigator
Hudson Intelligence assists law firms, businesses, public agencies and investors with cryptocurrency investigations, asset discovery and tracing, forensic analysis, and expert consulting.
Every cryptocurrency investigation is led by a Cryptocurrency Tracing Certified Examiner (CTCE) and Certified Fraud Examiner (CFE).
We are highly selective in our commitments and engagements. If you would like to discuss a potential investigation, please complete the form below. We also suggest reviewing our FAQ.