After a cryptocurrency scam, the shock for victims is usually considerable. Often, they feel that their invested capital is irretrievably lost once it falls into the hands of perpetrators via a decentralized blockchain. The widespread belief that cryptocurrencies like Bitcoin or Ethereum are fundamentally unassailable and irretrievable further intensifies this feeling of helplessness.
However, there is one significant exception that many investors are unaware of: Centrally issued stablecoins such as Tether (USDT) or USD Coin (USDC) offer the possibility, under certain conditions, of freezing stolen assets and thus creating the basis for later recovery.
The technical background: Central intervention options in a decentralized structure
While fully decentralized cryptocurrencies like Bitcoin are not subject to any central authority, stablecoins like USDT and USDC are issued by companies – specifically Tether and Circle, respectively. These issuers reserve certain control rights, which are technically enshrined in the token's respective smart contract.
The underlying contract includes administrative functions that allow the publisher to intervene, for example at the request of law enforcement agencies or within the framework of regulatory requirements.
Key functions include, in particular:
One Blacklist function, which places a wallet address on a blacklist, preventing any further transactions from being carried out from there.
One Freeze function, which blocks the tokens located at a specific address so that they can no longer be transferred.
Ultimately, a Wipe function, which allows frozen tokens to be removed from a wallet and transferred to another address – for example, for the benefit of the aggrieved investor.
These very possibilities for intervention fundamentally distinguish stablecoins from other crypto assets. Even if a perpetrator possesses the private key, they are denied access to frozen tokens. The assets are effectively blocked in the perpetrator's wallet. This gives victims a crucial head start in taking further legal action.
The practical process: From fraud case to account blocking
If stablecoins are involved in a cryptocurrency scam, victims have a clearly structured course of action. In practice, the process usually unfolds in several steps.
Once fraud is discovered, immediate action is essential. Perpetrators often transfer stolen funds within a very short time, so any delay increases the risk of losing track.
The next step involves a professional blockchain analysis. Specialized service providers or appropriately experienced law firms can trace transaction chains and identify the wallet address where the stolen stablecoins are currently located.
Based on a detailed tracing report, a structured statement of facts, and ideally a previously filed criminal complaint, the respective issuer – Circle or Tether – is then contacted. A letter from a lawyer regularly significantly increases the chances of success.
After reviewing the facts, the issuer's compliance department can initiate a blocking measure and freeze the wallet in question. Depending on the circumstances, this can happen within a few hours; however, a period of one to three days is more realistic.
Legal starting points: How the asset freeze supports asset recovery
Freezing the tokens is the key security measure. It prevents further outflow of funds and puts considerable pressure on the perpetrator, as they effectively can no longer access the blocked assets.
In parallel, civil claims must be asserted. These include, in particular, claims based on unjust enrichment pursuant to Section 812 of the German Civil Code (BGB) and tort claims, such as those under Section 823 Paragraph 2 of the BGB in conjunction with fraud or under Section 826 of the BGB.
In this context, the freeze acts as a preliminary protective measure. It increases the likelihood that a judgment subsequently obtained can actually be enforced. The resulting pressure often leads to an out-of-court settlement or compromise beforehand, as the perpetrator may have a vested interest in resolving the matter in order to regain access to other – unaffected – assets.
Conclusion: A significant advantage for victims
The ability to freeze centrally issued stablecoins like USDT or USDC represents a significant advantage for victims of crypto fraud. It undermines the perceived inviolability of the blockchain and offers an effective tool for asset protection. Crucial to this is the coordinated collaboration of specialized lawyers, blockchain analysts, and the respective issuers.
Anyone who has fallen victim to a cryptocurrency scam involving stablecoins should act quickly. Early legal review and the immediate initiation of appropriate measures are essential to secure assets and effectively enforce claims. Our experienced lawyers provide comprehensive support in the areas of cryptocurrency fraud and asset recovery, helping you assert your rights.
FAQs – Frequently Asked Questions
For purely decentralized cryptocurrencies like Bitcoin, technical blocking is not possible. However, for centrally issued stablecoins like USDT or USDC, issuers can, under certain conditions, block wallet addresses and freeze tokens.
Bitcoin is decentralized and not subject to central control. Stablecoins like USDT or USDC, on the other hand, are issued by companies that have embedded specific control mechanisms in their smart contracts. These mechanisms allow for regulatory intervention in exceptional cases – for example, by freezing tokens.
After a fraud, the stolen funds are often quickly transferred to cover their tracks. The sooner action is taken, the greater the chance of securing the tokens in an identifiable wallet and initiating a freeze. Time is a crucial factor for success in these cases.
If a wallet address is blocked or tokens are frozen, the affected assets can no longer be moved or transferred. The perpetrator effectively loses control over the blocked stablecoins, even if they still possess the private key.
Specialized blockchain analysis tools allow for the detailed tracking of transaction chains. Experts can thus determine which wallet addresses currently hold the stolen stablecoins and generate corresponding reports for further legal considerations.
Filing a criminal complaint is an important first step, but is usually not enough on its own. A successful freeze typically requires thorough documentation of the facts, often supported by legal representation and a professional tracing report.
Under certain conditions, frozen tokens can be transferred to another wallet, within the issuer's technical capabilities. Whether and to what extent this occurs depends on the individual case and the respective compliance checks.
In particular, injured parties can assert claims based on unjust enrichment pursuant to Section 812 of the German Civil Code (BGB) as well as tortious claims for damages, for example pursuant to Section 823 Paragraph 2 of the German Civil Code (BGB) in conjunction with fraud or pursuant to Section 826 of the German Civil Code (BGB).
Crypto fraud often has cross-border aspects. Therefore, questions of jurisdiction, applicable law, and international enforcement must be examined on a case-by-case basis. A coordinated approach is particularly important in these situations.
Crypto fraud cases combine technical, regulatory, and civil law issues. A specialized law firm can coordinate blockchain analyses, establish contact with issuers, enforce legal claims, and realistically assess the chances of success.
