{"id":6795,"date":"2025-01-02T00:37:27","date_gmt":"2025-01-01T23:37:27","guid":{"rendered":"https:\/\/atb.law\/?post_type=blog-post&p=6795"},"modified":"2025-03-14T11:01:03","modified_gmt":"2025-03-14T10:01:03","slug":"crypto-tracing-from-a-legal-perspective-methods-and-practice-of-digital-asset-tracking","status":"publish","type":"blog-post","link":"https:\/\/atb.law\/en\/blog-post\/kryptotracing-aus-anwaltlicher-sicht-methoden-und-praxis-der-digitalen-vermoegensverfolgung\/","title":{"rendered":"Cryptocurrency tracking"},"content":{"rendered":"

1. What is crypto tracing?<\/strong><\/h2>\n

Cryptotracing refers to the tracking of digital transactions on the blockchain. This involves analyzing transaction histories to draw conclusions about senders and recipients. To laypeople, the blockchain often appears anonymous, but in reality, transaction paths can\u2014depending on the specific blockchain and technical procedures\u2014in most cases be tracked back to a specific address at a cryptocurrency exchange (Crypto Asset Service Provider). In legal practice, this means that crypto transactions can be traced in a manner similar to bank transfers, provided the right analysis tools and expertise are available.<\/p>\n

2. Relevance in Civil and Criminal Law<\/strong><\/h2>\n

An experienced lawyer specializing in crypto tracing is used in various fields. When thinking of the application areas of crypto tracking, criminal law naturally comes to mind first. In the case of the theft of digital assets or the unlawful expropriation of crypto assets, crypto tracing actually plays a key role. With the help of blockchain analysis, perpetrators who commit criminal acts such as hacker attacks or ransomware attacks can be identified. According to current studies, global damages from crypto fraud now amount to several billion euros annually. A securely conducted crypto tracing procedure is therefore of central importance not only for the victims, but also for law enforcement authorities.<\/p>\n

In addition to criminal law, the tracking of cryptocurrencies and other digital assets (such as non-fungible tokens \u201eNFTs\u201c) on the blockchain is also increasingly applied in inheritance disputes, divorce proceedings, insolvency proceedings, and as evidence in civil lawsuits for damages. In civil law, for example, claims in the event of contract breaches due to incorrect or omitted payments using cryptocurrencies can be enforced in a traceable manner.<\/p>\n

In the legal field of anti-money laundering and compliance, crypto tracing has also become a fixed component. For example, crypto exchanges are required by applicable anti-money laundering laws to record transaction-specific data for every transfer of cryptocurrencies (Know Your Transaction \u2013 KYT). Investors, in turn, will regularly face the challenge of proving the legal proving the origin of your cryptocurrencies<\/a> (Proof of origin of funds<\/a>). A challenge that in many cases is simply not possible without tracking the cryptocurrency.<\/p>\n

3. Role of the lawyer in crypto tracing<\/strong><\/h2>\n

Although crypto-tracing involves a strong technical component, the lawyer plays an essential role in digital investigations. On the one hand, they ensure that the ascertained data is prepared in a legally usable manner. On the other hand, they act as an interface between clients, IT forensic experts, and investigative authorities. A specialized lawyer can optimally support their clients, whether in the enforcement of civil claims, cooperation with law enforcement agencies, or the certification of the harmless origin of assets.<\/p>\n

4. Frequently asked questions about crypto tracing from a legal perspective<\/strong><\/h2>\n

How complex is crypto tracing?<\/strong><\/p>\n

The effort depends on the number of transactions to be traced, the blockchain or cryptocurrency used, and the individual circumstances of the specific case (in particular, the transaction behavior of the perpetrators). Some blockchains (e.g., Bitcoin) or transaction methodologies (UTXO vs. Account-Based Model) are relatively transparent or easy to trace. In contrast, there are blockchains or cryptocurrencies (e.g., Monero or Zcash) that are designed for privacy and, as things currently stand, cannot be traced comprehensibly (at least with commercial analysis tools).<\/p>\n

Can every transaction actually be traced or reversed?<\/strong>
Unfortunately, clear tracking is not always possible. Aside from so-called privacy coins (e.g., Monero or Zcash), there are also groups of perpetrators who manage to obscure the money trail using highly complex obfuscation techniques. Nevertheless, even in these cases, there are starting points for tracking down the perpetrators. In addition to focusing on recognizable transaction patterns, the possibility of analyzing the entire money laundering network (i.e., including all transactions of all involved addresses in the analysis) offers a particularly valid approach.<\/p>\n

How quickly can a result be expected?<\/strong>
Here too, it depends on the complexity of the individual case. Simple transaction chains can be tracked and prepared within a few hours. In the case of large money laundering networks, processing time can also take several weeks.<\/p>\n

What costs will be incurred?<\/strong>
The costs depend on the software used and the effort required to trace the cryptocurrencies and prepare the data in a comprehensible manner. While (very) simple tracking costs a few hundred euros, the costs for complex tracking\u2014especially elaborate network analyses including their preparation\u2014can also be in the five-figure range. However, reputable law firms can provide reliable cost estimates in advance (after an initial rough analysis) so that clients can make a clear decision.<\/p>\n

How does the presentation of evidence work in court?<\/strong>
All collected data must be documented in a legally admissible manner. This includes a complete and unbroken representation of the transaction routes, where applicable in the form of expert reports or opinions by court-sworn experts.<\/p>\n

5. Blockchain Analysis and Tools<\/strong><\/h2>\n

When tracking cryptocurrencies, special software solutions are used. Among the best-known tools that evaluate publicly accessible blockchain data and create transaction graphs from it are<\/p>\n