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Cryptocurrency: The new place to hide money?

By September 28, 2022Cryptocurrency

Despite being around for over a decade, cryptocurrency has taken the world by storm in the last few years.

Bitcoin is the most well-known cryptocurrency, and despite the coin being known for fluctuating in price, Bitcoin hit an all-time high of $65,000 in November 2021. Those that had invested at the origin when Bitcoin was worth pennies would have made a small fortune!

With cryptocurrency becoming very popular and a lot more mainstream, it has become almost impossible for Countries and Governments to ignore this. Governments all around the world have started to regulate and safeguard those who are looking to delve into the crypto world. For example, the UK’s money laundering regime requires crypto asset firms set up in the UK to register with the Financial Conduct Authority (FCA).

The UK has also recently introduced The Economic Crime and Corporate Transparency bill which will make it easier for enforcement agencies to seize, freeze and recover crypto assets if they have been used for criminal activities. The bill is designed to build on the act that was used to place sanctions against Russia at the start of the Ukraine war. This is one of the biggest steps we have seen against fighting cryptocurrency crimes.

Cryptocurrency was originally designed to be free of the usual accountants, solicitors, and banks that ordinary currency is used to. As cryptocurrency has matured, however, there has been an increasing number of cryptocurrency enthusiasts coming forward to ask for assistance.

This can be seen in the drafting of SMART contracts. These contracts have the option to remain anonymous, but more recently there has been an outcry for legal experts to be able to draft SMART contracts that can protect investors from the worries of rug pulls and make sure their investment is protected.

Although rules are being implemented, there is still limited regulation for individual users, especially when compared to similar areas such as the Stock Market. This raises suspicions as to whether individuals are taking advantage of the limited regulation by using cryptocurrency to hide their assets.

Despite many criminals thinking cryptocurrency is the new place to scam victims or to avoid taxation, the ‘blockchain’, where all assets are stored and transferred, can be viewed by anyone. This can be done in great depth if you have access to the right tools.

Our partner firm, Wealth Recovery Solicitors (WRS), uses specialised software to scan the blockchain to look for cryptocurrency that has been stolen from clients, usually as a result of a scam. This means that if the scammer has moved the cryptocurrency from the initial location, the WRS team have the facilities to trace this all the way through to the end point and ultimately find where the property has been moved to.

The crux of a cryptocurrency scam follows similar trends, where the scammer encourages a customer to purchase legitimate coins and instructs them to invest through their platform with these coins rather than fiat (normal) currency. The victim will normally be presented with a fake screen that shows the ‘money’ going up and down, when really the scammer is pocketing the cryptocurrency in the background and using this tactic to encourage further ‘investment’.

We believe the only reliable way to recover your stolen cryptocurrency is via tracing the property through the blockchain, rather than trying to discover who set up the website and the details behind the probable ‘shell company’.

The reality now, however, is unless these scams are reported, and an actual trace investigation through the blockchain takes place, the majority of scammers will get away with these crimes. Governments worldwide are aware of this, and we can expect further harsher regulation in the future, as we are already beginning to see with the Economic Crime and Corporate Transparency bill.

If you or anyone you know has lost cryptocurrency as a result of a scam, or any other reason, please do not hesitate to get in touch with our cryptocurrency specialists at WRS ETL. Contact Joshua Chinn, Director, via email: or phone: 0203 695 9239.


Ryan Baratzi

Author Ryan Baratzi

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