How can I recover stolen crypto assets?

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I worked my way from rags to riches, founding a sustainable clothing e-commerce business during the pandemic. As a cryptocurrency enthusiast, I have looked for ways to increase my digital asset savings through various investment programs. However, I am aware that investment scams have tripled. How do I protect myself? If I were the subject of such criminal activity, how could I recover stolen assets and what are the additional complexities of tracing stolen cryptocurrency versus fiat currency?

Stephen Ross, Partner at Withers

Stephen Ross, a partner at law firm Withers, says you need to approach this with detailed due diligence and a healthy dose of skepticism. Start with the Financial Conduct Authority’s own warning list, which identifies companies operating without their permission or running known scams. But don’t assume that if a company isn’t mentioned, all is well.

If you are considering regulated investments with underlying crypto-assets, check out the FCA Register. That said, scammers are very sophisticated and often use ‘clone’ companies that exploit the details and websites of real companies to dupe investors and hijack their business.

Try checking the details independently at Companies House, where you can search for company names and directors for free and use the contact details provided in the FCA Register to ensure you are dealing with the real entity and not a clone.

It goes without saying that unsolicited approaches, promises of high returns online and on social media, and any pressure to act quickly are all red flags.

If you have invested in a regulated scheme and find that you have been scammed, you may have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme, but there are limits to the compensation you can receive. If you’ve invested in an unregulated system, you’re much less likely to get any money back.

It is possible to trace cryptocurrency, despite an overall perception of secrecy and anonymity. Using bitcoin as an example, all transactions are ultimately public and recorded on the blockchain. Thus, with appropriate software, it is possible for analysts to track transactions or discern patterns related to the movement of bitcoin between addresses.

Armed with this information and assuming there is a connection to England and Wales, lawyers can help you try to recover the crypto assets or any converted money or assets using the powers of the English court to issue freezing injunctions around the world (even when the perpetrators are unknown) and demanding disclosure to innocent third parties such as stock exchanges and banks. These are powerful legal tools, but they don’t come cheap or guarantee ultimate success.

You are unlikely to be able to launch such an exercise without investing at least £50,000 (if not more) and any lawyer who tells you otherwise is not your friend. You should also be aware that you may need to track assets worldwide at an additional cost.

You should also inform the police or Action Fraud, but historically this means little or no action is taken.

If you’ve been scammed, your time and effort may be better spent keeping your other assets safe. Fraudsters can target you again or sell your details to others. Beware of people contacting you claiming they are acting for others who have been victims of a similar scam. It may be a “fraud recovery scam”, exploiting your desperation and panic that you have been scammed and another way to extract money from you.

Is “nesting” a good option in a divorce?

My husband and I are going through a divorce. We have two young children in primary school and are co-owners of our family home. There is a lot to organize financially and practically, and we want to disrupt the lives of our children as little as possible. We’ve heard of couples doing “nesting” during divorce, where one parent moves out for a few days while the other stays home, before swapping a few days later. Would this be the right option for us? What do we need to take into account to make it work?

Dal Heran, family law manager at Wright Hassall

Dal Heran, family law manager at Wright Hassall, says many divorced couples with children plan to nest. Like you, they want to keep things as consistent as possible for their children. In fact, I talk almost as much about the practical side of divorce with clients as I do the legal stuff.

The truth is, there is no set-in-stone method for a nesting arrangement, and it should be tailored to your personal needs. But there are several things you should discuss with your partner before going down this path.

The most important thing to consider is the limits. Often parents don’t want to use the same room the other parent used, so sleeping arrangements need to be considered. If you have a free room, that’s fine. but if not, you need to consider whether you’re both comfortable sleeping in the same room the other parent uses when it’s your turn to stay home.

It is essential to plan where you will stay when you are not at home. Some parents even decide to rent a separate second home instead of staying at a hotel or with friends, just to try to have a certain “normality”. But this needs to be carefully considered because if you are renting a second home to share on the exchange, it is another way of living with the person you are divorcing.

You should discuss how you want to split the bills for the family home and, if you decide to rent a second property, agree on the method of payment. It’s also essential to understand how you will distribute the days at the family home: you may want these days to fluctuate according to work schedules, or for each of you to have a weekend with the children.

I also advise couples to think about what happens during school holidays or if their children are not feeling well and need time off from school. Planning for these situations and having a clear plan will help eliminate difficulties if you decide to go the nesting route.

Finally, you should think about how long you would ideally want to do this. Is this a short term or long term arrangement? Many divorced parents end up meeting a new partner, so if this is a longer-term plan, it’s essential to consider how this living arrangement might match your hopes for the future.

Thinking about the bigger picture will help you understand if it’s right for you and your family. Feedback from different pairs that use a nesting approach has been mixed. Some felt it was a positive experience for everyone involved, while others felt it was confusing for their children dealing with their parents’ divorce.

For this to work well, your relationship must be based on trust. It’s also important to be transparent with your children. Keep talking to them about what’s going on and explain to them what you’re doing. With clear communication and defined boundaries, it is possible to make nesting a success, but it is essential that you plan for different scenarios instead of jumping feet first.

The reviews in this column are intended for general informational purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect results arising from reliance on the answers, including any losses, and exclude all liability to the fullest extent.

Do you have a financial dilemma that you would like FT Money’s team of professional experts to address? Email your issue confidentially to [email protected]

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