With increasingly stringent global anti-money laundering standards and the implementation of my country's new Anti-Money Laundering Law, cryptocurrency crimes have become characterized by "high frequency, high amount, and high concealment." From early fake trading platforms to today's on-chain phishing and fragmented money laundering using smart contracts, victims not only face asset losses but also find themselves in a predicament of information asymmetry and difficulty in providing evidence. However, in judicial practice, victims generally face a core dilemma: knowing that their funds are "still on the blockchain," they struggle to get the police to seize, freeze, and dispose of them. This is often due to incomplete evidence, unclear reports, and insufficient communication and cooperation, leading to missed opportunities for investigation. This article, combining the latest judicial practices and technological means, aims to provide victims with a clear and feasible path to help break the deadlock in recovery. The first point regarding the possibility of on-chain asset tracking: How does the law view your cryptocurrency losses? This depends on the nature of the matter. If it's a common investment or transaction dispute, and you believe the project team failed to fulfill its obligations, the court is likely to consider it a matter of risk self-assumption, making recovery difficult. But if you were scammed, robbed, or victimized, the situation is entirely different. Judicial practice now clearly defines cryptocurrency as legally valuable "property." Therefore, public security organs have a responsibility to investigate and prosecute, and to legally recover and confiscate these illegal gains, returning them to the victims. Secondly: Technology can track transactions, so why don't the police immediately freeze them? Blockchain transaction records are publicly verifiable, but this doesn't mean the police can act immediately. For the police to freeze assets, they need clear evidence to prove that "this money was defrauded from the victim and flowed to this specific address or account." The anonymity of cryptocurrency and the rapid transfers by criminals (such as using cross-chain or coin mixing tools) make the first few hours to 48 hours after a report crucial. If the chain of evidence is unclear or incomplete, the police cannot effectively carry out their work. Thirdly: The key to success lies in the "first-hand evidence" you provide. To push for a case and successfully freeze assets, the quality of the evidence you submit is crucial. Especially when involving overseas platforms or complex transfer paths, chat screenshots alone are far from sufficient. You need to prepare a package of evidence that clearly explains the following: Proof of identity: Who are you, and who is the other party? Proof of behavior: How did the other party defraud/steal from you? What was the complete process? Proof of Funds: Where did your money come from, and to which specific blockchain address was it transferred? Technical Analysis: (If possible) Show the subsequent flow of funds, proving where it ultimately went. Simply put, the more professional and clear your preparation, the faster and more successful the police operation will be!Building a Systematic Chain of Evidence: From Identity Anchoring to Fund Flow To help you effectively report a crime and advance police action, you need to prepare a clear and compelling set of evidence. This evidence can be organized and understood from the following four levels: Step 1: Prove "Who you are" and "Where your money came from." This is the starting point for everything. You need to prove to the police: 1. Your real identity (ID card). 2. The legitimate source of your invested funds. This includes: Original records of your bank card or Alipay/WeChat Pay transfers to purchase cryptocurrency. This proves your money is clean. Your account information on centralized exchanges (such as UID, screenshots of real-name authentication, and linked mobile phone number). This proves these asset accounts belong to you and is the basis for future fund returns. Step 2: Completely and accurately reconstruct "How the money was transferred?" This is the most crucial technical evidence and cannot rely solely on screenshots. You need to compile the following three pieces of information for each transferred transaction: 1. Transaction hash (TxID): This is the unique "ID number" of this transaction on the blockchain. 2. Wallet address: The address for transferring and receiving funds. 3. Precise Time and Amount: Organize this information into a clear table and include links to the results found in a blockchain explorer. This allows police and tracking experts to clearly see the flow of funds. Third Step: Prove the other party is "not engaging in normal transactions, but committing a crime!" This is to ensure the police accurately classify it as fraud or theft, not simply an investment loss. You need to gather evidence proving the platform or individual's fraudulent activities, such as: fake platform websites and promotional materials; chat logs promising "guaranteed principal and high returns"; and screenshots of community trading recommendations. If your account is operated by someone else (e.g., mysteriously stolen), you should proactively contact the exchange to obtain abnormal login records, IP addresses, or large transaction risk control reports. This strongly refutes the claim of "your own operational error." Fourth Step: Provide a professional "funds flow chart" indicating key exits. When funds have undergone complex transfers, such as multiple transfers or coin mixing, a funds flow analysis report issued by a professional institution is crucial. This report transforms a jumbled list of transaction records into a clear "money trail," achieving two key objectives: 1. Tracing the destination: Clearly identifying which platform or address your money ultimately ended up on. 2. Finding leverage: If the money ultimately flowed into a centralized exchange requiring real-name authentication, the police can use this report to quickly issue legal documents to that exchange, demanding the freezing of the relevant accounts. This is a crucial step in achieving asset recovery.The core of the report lies in identifying the final "exit" point of the assets. If the funds ultimately flow to centralized exchanges requiring KYC verification, or belong to a known "OTC money laundering" black market fund pool, then the public security authorities can send a letter of assistance to the exchange or take emergency payment stoppage measures. Practical communication skills: How to effectively communicate with law enforcement agencies. When reporting a crime, how clearly and professionally you present the case directly affects the police's judgment and subsequent actions. The key lies in three points: First, accurately state the nature of the case. Don't simply say "I was scammed" or "I lost money on my investment." The police need to clearly determine that this is a criminal offense rather than a common economic dispute. You can express it like this: "I encountered a scam (or theft/illegal fundraising) using cryptocurrency. The other party was not a legitimate trading partner, but transferred my assets through a fake platform (or phishing link/illegally operating my account)." This will directly guide the police to handle it as a criminal case. Second, clearly explain the path of funds. Use the fewest words possible to clearly state the key information. To help the police quickly grasp the key points, you can use this template: "My money was transferred from my verified [XX Bank/Alipay] account to my account on [XX Exchange] (e.g., Huobi), converted to [USDT], and then transferred to the wallet address provided by the suspect on [Date and Time]. Preliminary tracing indicates that this asset has flowed to [XX Overseas Exchange/A Well-Known Money Laundering Address Pool], and is still traceable." This immediately makes it clear to the police: the asset flow is clear, there are potential for tracing, and the situation is urgent. Thirdly: Proactively provide action plans. The police may be unfamiliar with blockchain operations. You can proactively provide clear guidance to assist them in quick action and facilitate rapid progress: Submit an "Asset Freezing Recommendation": Compile a written document outlining the specific currencies to be frozen, the wallet address, the current platform (if any), and the estimated value. This significantly saves the police verification time. Inquire about technical support channels: Police in many regions have established partnerships with professional blockchain security companies. You can politely inquire: "Do you need us to contact a professional technology company to provide a fund flow analysis report, or assist in issuing legal documents?" or "Do you need our cooperation in issuing a formal technical appraisal assistance letter?" Asset Disposal and Realization: New Judicial Trends in 2026 Asset freezing does not mean the end of the rights protection process. The key concern for victims is "asset disposal and return." The subsequent process mainly involves the following three core aspects: First: How to legally realize assets?In the past, selling cryptocurrency privately through unofficial channels was very risky. Now, there are more standardized pathways: for example, pilot programs have begun in Beijing and other places, where the police entrust officially designated compliant institutions (such as the Beijing Equity Exchange) to conduct public auctions. You need to pay attention to ensuring that the liquidation process is open and compliant, and that what returns to your account is legal local currency (RMB). This can fundamentally avoid the risk of "the money being frozen again after it returns." Second: What fees will be deducted during the return? During the disposal process, necessary third-party service fees such as technical analysis and asset custody may be incurred. You need to pay attention to: with the help of a lawyer, understand whether these fees are reasonable and whether the deduction ratio is transparent. Ensure that your returned amount is clear and traceable to avoid unnecessary losses of assets during the disposal process. Third: What if the money flows abroad? For funds that have been transferred to overseas exchanges or addresses, there are still international cooperation mechanisms that can be tried: Core strategy: Encourage law enforcement agencies to issue a notice of assistance through Interpol, or contact stablecoin issuing companies (such as Tether, the issuer of USDT) to apply for the relevant wallet addresses to be blacklisted. Once successful, the USDT in these addresses will be frozen globally and cannot be transferred, thus buying valuable time for our subsequent legal recourse. Mankiw summarizes: the core of recovering money is "legal monetization, transparent return, and utilizing international mechanisms for recourse." Understanding these pathways can help you cooperate more effectively with the police and lawyers, promoting the safe and maximum return of your assets. In conclusion, protecting rights in the cryptocurrency field is a protracted battle against time and technology. In the current legal environment, victims can no longer passively wait but should act as "evidence builders" and "technology providers," turning passivity into initiative by building a robust chain of evidence and a professional communication mechanism. Remember: the earlier the intervention, the more detailed the evidence, and the more professional the expression, the higher the likelihood of asset recovery. Cryptocurrencies are not an untouchable lawless zone, but rather a "public ledger" where every detail leaves a trace. Guideline Checklist 1. Basic Identity and Account Evidence Victim's identity certificate Bank account information (for deposits/withdrawals) Exchange account registration information (UID, linked mobile phone number, email) Screenshot of platform real-name authentication 2. Fund Flow and On-Chain Evidence For each transaction involved in the case: Transaction hash (TxID), wallet address (sender/receiver), transfer timestamp, currency and amount, full screenshot of the blockchain explorer page (including URL). Records of failed/intercepted transfers (if any). Apply for timestamp/notarized proof from a third-party platform (such as a notarization platform).If the wallet supports on-chain signatures, signature operation records can be exported to prove ownership. 3. Platform and Behavioral Evidence: Screenshots of investment platform pages (return promises, rule descriptions), customer service chat logs, group chat screenshots, operational promise screenshots, abnormal operation records (login logs provided by the trading platform or wallet, IP address records, unauthorized transfer records, unusually large transfers, etc.). 4. Fund Analysis and Technical Report: On-chain tracing path diagram, multi-address clustering analysis, determination of the final flow of funds (exchanges/mixers/cross-chain bridges), calculation of the amount involved and coin price (indicating time points). 5. Freezing Recommendation: Coin type, wallet address, current valuation, potentially associated exchanges, urgency of freezing. 6. Key Supervision Points During the Disposal Stage: When the court decides to dispose of virtual currency, the victim and their lawyer should focus on: whether the monetization platform is compliant and licensed; whether it complies with foreign exchange management requirements; whether the disposal fees are reasonable; whether the return path is closed-loop; and whether the victim's return ratio is transparent. [Mankiw Blockchain Legal Services]