For example, in November last year US authorities worked with tether and exchange OKX resulting in a freeze of $225mn, with assets linked to a human trafficking syndicate in South East Asia.
Further, Grant Thornton’s independent audit report of Circle Internet Financial Inc, the issuer of USD coin (another stable coin) notes the “ability to blacklist addresses”, stopping private wallets from transacting altogether.
These processes are available via civil routes too, usually with help from law enforcement. Through these methods, including a token burn and remint, victims can be made whole again.
Moving forward
Quiet stoicism keeps the industry at a plateau and all instances of fraud should be reported to law enforcement.
Of course, more should be done to discourage bad actors and prevent frauds altogether, but by sharing stories we can educate other potential victims and break the fraud cycle.
The Law Commission has also recommended that the direction of travel should be driven by case law, so the more trodden the path, the more precedents set for recovering crypto-assets.
While the recovery of cryptoassets can often feel like chasing ghosts, in many instances those ghosts are incredibly helpful, casting a wide net to allow exchanges and token issuers to be the force for good in helping recoveries.
Matt Green is the head of blockchain and digital assets, and head of technology disputes at Lawrence Stephens
