paper wallet – Recovery from theft — Tracing money to exchanges

In brief:

• You are not going to get your money back
• If you try, you will lose more money
• The money has by now probably passed through many exchanges and mixers in many corrupt foreign countries. And through the hands of other tricked victims.
• As a victim of one crime, you are especially attractive to other confidence tricksters for further crime. Be on guard.
• Report the theft to the police
• Ask your police commissioner and/or political representative to act
• Accept the loss, move on.

Longer answer:

can anything be done?

No

I would contact local police. Though they won’t be able to recover any money.

You will now be contacted by scammers using private messaging. They will tell you they can get your money back. Once they have your trust, they will tell you about a small release fee or a transaction fee or that you need to put money in to meet a refund threshold. In short they will make up lies to trick you into giving more money to criminals. Ignore all messages that are not on a public place, like this website, where many people can read the advice you get and correct any bad advice.

I lost my life savings

I’m sorry to hear that.

In retrospect you made some mistakes which I would suggest anyone else reading this should take care to avoid repeating:

• Don’t put all your savings into one place.
• With volatile high-risk assets like Bitcoin, don’t invest money you can’t afford to lose completely.
• Never use online paper wallet generators (some are relatively safe to use offline, but best advice is avoid all).
• Always do as much checking as possible before sending money to online businesses.

Is it possible to determine which exchange were the coins sent to, looking at the transaction ID or wallet ID?

The transaction ID does not identify people or businesses.

There is no Wallet-ID but there are “addresses” which people sometimes call a wallet ID – although a wallet can have hundred or thousands of different addresses. Nowadays, wallets generate a new address each time they are used to receive money. Bitcoin addresses are not like real-world addresses – they don’t identify a person, business or place, Bitcoin addresses are random-looking numbers that are generated from other secret random-looking numbers.

Sometimes you can guess that an address was generated by an exchange because it is subsequently used in a bulk transaction with hundreds of other addresses – either consolidating funds or dispersing them en-masse. This doesn’t tell you which exchange was used. A diligent forensic analyst may be able to eventually identify an exchange by use of test transactions and long-term data analysis.

Maybe I could write to exchange to block it?

The problems are:

• The money won’t stay at an exchange long. The exchange probably no longer has the money.
• The exchange won’t disrupt their customers business at the say so of a random stranger
• The exchange has data-protection responsibilities. The have to protect the identity of their customers. It may take a court order to get them to act.
• Criminals don’t use their own name and KYC details at an exchange, they trick other victims into opening accounts in the other victim’s name and giving the criminal the password (see numerous “sugar daddy” and fake-job scams reported here).
• You may be dealing with exchanges, or a trail of different exchanges in far- away places like Russia, China, Nigeria, Switzerland and other tax-havens or countries with corrupt or semi-functional law enforcement. Getting their cooperation will be hard.

You have to involve law enforcement.

Recovering the money may cost tens or hundreds of thousands of dollars and take years. Most likely it will prove impossible. You were duped once, if you go down this path you will almost certainly be duped again. Several times.

I hate giving this sort of advice because making people give up aids the bad guys. But I don’t like to think of people throwing good money after bad and making their situation even worse. The best thing you can do is probably work with local law enforcement, try to get your local political representative to appreciate the impact this type of crime has on their electorate – you are not the only one affected.