As Sam Bankman-Fried heads to court facing a potential life sentence for his role in the FTX collapse that robbed people of billions of dollars, the question of how to recover stolen crypto is front and center for many in the crypto space. Due to the immutability of blockchain transactions, many assume that once cryptocurrencies are lost or stolen, there’s no way to recover them, but that isn’t the case – thanks to Jurat!
Whether you’ve fallen victim to a scam or lost your private keys, Jurat’s technology can help you recover crypto previously thought to have been lost forever. This guide will walk you through the crypto recovery process using Jurat.
Stolen Crypto Is A Billion Dollar Problem
Tools for recovering stolen cryptocurrency are needed more now than ever. Estimates vary, but crypto scams, hacked exchanges, and rug pulls cost $1 billion or more every year.
Beosin Alert is a smart contract auditing service that monitors security breaches on-chain. Its X feed is a witness to swindles and hacks throughout the crypto world. In one hack alone, Beosin over $50 million (later raised to over $70 million) stolen from cryptocurrency wallets.
Beosin Alert suspects that the Coinexcom drainer stole over $50 million in cryptocurrency from numerous users in September. Source: Twitter.
Hacks, such as those identified by Beosin, frequently target individuals for whom losing $10,000 or less can be a ruinous financial blow. These all too frequent hacks are often driven by inadequate education about the risks of exploits by criminals who take advantage of the anonymity crypto provides.
Lost Keys and Passwords
Losing your private key or sending tokens to the wrong wallet address is not the same as forgetting your online banking password or sending money to the wrong bank account. There’s no Bitcoin helpline or Google authentication recovery option. A lost password or incorrect transfer can mean that your crypto is gone. Forever.
In fact, roughly 20% of Bitcoin’s entire supply, worth over $100 billion, is believed to be lost. Stefan Thomas, a German programmer, is one of the famous figures in the unfortunate world of lost crypto. He lost the password to his wallet, which holds over $200 million worth of $BTC. The wallet will lock him out permanently if he enters the wrong password two more times. Stressful, to say the least.
Stefan’s unfortunate story is not unique. James Howells, for example, accidentally threw away the hard drive with his keys to hundreds of millions of dollars in Bitcoin. He is currently suing the landfill operators in his hometown to let him dig up tons and tons of garbage in hopes of finding it.
Countless other people have lost their crypto due to forgetfulness or a misplaced piece of paper that contained their 12-word seed phrase. The fear of losing money in such a way has discouraged people from onboarding into crypto, damaging the industry and consumers. If crypto is to become a means for people around the world to bank themselves and hold their life savings, the situation cannot continue.
Recovering Lost Virtual Assets with Jurat
Jurat offers a solution for recovering cryptocurrencies that are inaccessible due to lost passwords, seed phrases, or sending funds to the wrong wallet.
Imagine that losing your crypto wallet’s private key is similar to someone taking your Rolex. You know it’s your Rolex, and you know exactly where it is, but the thief won’t get you access to it.
Similarly, lost or stolen crypto is still yours; you just need to prove ownership and have a way to reclaim it. That’s where Jurat comes in. For blockchains that adopt Jurat, like the JTC blockchain, a user can go to court to prove the crypto belongs to them and have the court enter an order returning it.
Let’s take a case where your crypto is in an unhosted address, and you no longer have the private key. If your blockchain includes Jurat, you can start a case to recover it (which is much easier than digging up a landfill).
As the wallet holder, you start by generating a Jurat Request ID that identifies your coins and their location. This ID informs the court where to send the coins, typically to a wallet under your control.
The case then goes before a judge. To win your case, you must demonstrate to the judge that the coins in the wallet belong to you. This can be achieved in various ways, such as presenting records from a centralized exchange like Coinbase, proving that you sent the coins to your unhosted wallet. This is just one example; judges can consider many forms of evidence.
If the judge rules in your favor, they will include your Jurat Request ID in their written ruling and place it on the public docket. Jurat-enabled nodes then process the request, and the miners execute the transaction automatically, returning your crypto to the wallet you control.
Recover Stolen Crypto with Jurat
Blockchain in the legal industry has been lagging behind for years, but Jurat has created a legal base layer that can be used to recover funds stolen by hackers. The process of using Jurat in court is as follows:
- Generate ID: The claimant creates a Jurat Request ID through the Jurat user interface. The ID is essentially a code that details the transaction the claimant wants the court to add to the blockchain, such as freezing a wallet or returning coins.
- File a Lawsuit: File a suit and give the Jurat Request ID to the court. The judge must then decide the case. If the judge sides with you, he or she will include the ID in a written ruling and upload it to the public docket.
- Docket Connect: Jurat-enabled witness nodes access the court’s public docket and can recognize the Jurat Request ID. The nodes make this information available to all the blockchain miners.
- Transaction Execution: The miners then execute the transaction in line with the judge’s ruling.
Let’s examine this process in action by looking at a Jurat case study from earlier this year. A United States federal court used Jurat to freeze crypto suspected of being stolen by an international hacking group supported by the North Korean government. The judge heard the lawsuit and ordered the crypto wallets to be frozen. She then included the Jurat ID, and the clerk docketed it. Jurat nodes picked up the order the same day by accessing the docket, and a transaction was executed that froze the corresponding accounts.
Thanks to Jurat, crypto hackers and scammers can no longer hide from their victims.