Question 1

Isn't cryptocurrency untraceable?

Accepted Answer

Usually the opposite (§2, Example 1). Most crypto runs on public blockchains, permanent, open ledgers that record every transaction forever, so funds are often more traceable than money in the banking system. The difficulty is not seeing the transactions but tying an address to a person, and dealing with deliberate obfuscation like mixers. A specialist can frequently follow the funds and, through exchanges and devices, name the holder.

Question 2

If we can trace the funds, do we know who owns them?

Accepted Answer

Not from the ledger alone (§5). The blockchain records addresses, not names, so tracing shows the flow of value, not who controls it. Attribution comes from off-chain evidence: exchange know-your-customer records where funds are cashed in or out, wallet software and keys on a person's devices, recovered seed phrases, and behavioural links. Tracing and attribution are two different tasks, and naming the owner depends on the second.

Question 3

What is a seed phrase, and why does it matter so much?

Accepted Answer

A seed phrase is the master secret that controls a wallet's keys and there for e its funds (§3). Because ownership of crypto is control of keys, possession of the seed phrase is powerful evidence of ownership, and one recovered from a person's own device, cloud note or notebook (Example 2) can prove control of addresses they deny owning. It is among the most compelling attribution evidence, which is why devices, backups and notes are examined, not just the ledger.

Question 4

The funds went through a mixer. Is the trail dead?

Accepted Answer

Not necessarily (§6, Example 1). Mixers pool and shuffle funds to break the link between source and destination, and they complicate tracing, but analytics and timing can some time s see through enough of the mixing to continue the trace, and the funds often surface again at an attributable exchange. A mixer lowers confidence and may in some cases defeat the trace, but it is an obstacle to be assessed honestly, not an automatic dead end.

Question 5

Can crypto be frozen and recovered?

Accepted Answer

Often yes (§7, Example 1). Tracing supports freezing orders and proprietary injunctions over identified assets and against the exchanges holding them, and disclosure orders (including against persons unknown and third-party exchanges) compel the records that name the holder. Because funds move fast, freezing and preservation are sought urgently. Traced and attributed crypto is frequently recoverable, which is why acting quickly matters so much.

Question 6

Could someone be hiding cryptocurrency in our matter?

Accepted Answer

It is common in divorce and insolvency (Example 3, §7). Crypto is used to conceal assets from disclosure, but device artefacts (wallet apps, exchange accounts), exchange records and the permanent public ledger together routinely expose holdings a party has left off their statement of assets. The concealment itself, measured against a sworn disclosure, then becomes evidence. If hidden crypto is suspected, the devices and exchanges are tested rather than the bare disclosure accepted. cflab. u k · e-disc ove r y. u k ©2026 Computer Forensics Lab Ltd ·cflab.uk ·e-discovery.uk ·info@cflab.uk ·+44 (0)20 7164 6915 Page 15 of 17

Cryptocurrency And Blockchain Tracing