TL;DR Breakdown
- Dr Craig Wright’s attempt to retrieve stolen coin could awaken wider public to possibility of getting missing assets back.
- Government disposition towards cryptocurrency would determine success or failure of attempts to retrieve digital assets.
The security of cryptocurrency systems is a simple yet complex chain of contradictory commands, safe yet unsafe. The blockchain technology on which crypto systems run is an “open source” program; this makes for transparency in transactions; anyone with basic computer skills could access the “digital ledger” on which these transactions are recorded.
However, like most internet-based systems, the safety of crypto assets and the system is mostly dependent on the owners’ actions. While crypto systems can be a hard nut to crack, there have been reports and confirmed cases of systems being infiltrated by hackers, malicious viruses, Trojan horses, that have resulted in stolen crypto assets. In the early years of crypto, cyber attacks were combatted by using two security keys to protect Bitcoin accounts, public access and a private key known only to the owner of the account. But in today’s world, malicious players have found a way around this security firewall using malware that leaves users vulnerable.
Crypto-crimes such as cryptojacking, fraud, theft, hacking have been the bane of cryptocurrency acceptance globally, with governments moving to either regulate exchange or clampdown on crypto operations as a means to protect their citizens.
One such example of a massive digital coin theft was the one perpetrated on the 15th of July, 2020. A “cyber raid” was executed on popular social media network “Twitter.” It was a cyberattack targeting the Twitter accounts of influential powers or financial heads, especially accounts with a large following. Targets included Barack Obama, Bill Gates, Elon Musk, Apple, and a host of other influential entities. The hacked accounts were used to trick people into making Bitcoin payments to a specific Bitcoin address and over $130,000 worth of the virtual coin was gotten from that operation. There have been other notable cases of stolen BTC and other crypto coins too.
While there are currently tech enterprises helping in tracking and retrieving stolen coins for victims, there is a growing movement to strengthen the law surrounding the retrieval of stolen coins and penalizing fraudulent operators. Simultaneously, governments and financial authorities are finding ways to better protect their citizens and involving the crypto exchanges in the fight against fraudulent transactions through different policies and regulations.
However, one major pitfall of taking legal action against exchanges and developers would be the government’s stand on cryptocurrency and its operations within their jurisdiction. In countries where cryptocurrency operations are prohibited, there is little or nearly nothing that can be done legally in cases of crypto theft or fraud. A prohibition decree makes all crypto operations, whether right or shady, illegal.
But in countries where cryptocurrency operations aren’t prohibited, the court’s authority could come in handy in reclaiming stolen cryptocurrency assets. Though there are limitations to what the court can do or choose to do. The court mostly derives its authority from the constitution, which makes it the only recognized jury. Hence, justice must be carried out observing constitutional clarity (i.e., the court must abide by the accepted constitution’s decrees).
While the court is prejudiced towards crime, the constitution might give it clear jurisdiction to make an all-powerful decree ordering exchanges and developers to retrieve stolen coins on behalf of the owners, without adequate evidence, i.e., proof of fraudulent transaction or asset loss, with hackers becoming increasingly good at erasing traces of their digital prints and developers looking to maintain its trustworthiness by protecting user info.
Tulip Trading Limited and the missing coins
Before this case, there hasn’t been any known case of legal action being taken against crypto developers to force them to retrieve coins stolen on their blockchain. However, the dust this case has unsettled would convince other disgruntled or defrauded users of taking legal action against exchanges or developers.
Seychelles-based company Tulip Trading Limited (TTL), through its legal partner, Ontier LLP, started a lawsuit against Bitcoin developers and the developers of altcoins such as BCH, BCH, ABC, and BSV. The lawsuit is a case of theft of crypto-assets worth £3.5billion. While the company isn’t accusing the developers of aiding the cyber attack that left TTL’s system vulnerable, it says that if the developers and miners refuse to help, they would be regarded as complicit.
According to the company’s CEO Dr. Craig Wright, the original Bitcoin “white paper” allowed developers to interfere in cases such as this, to rewrite the program on the blockchain and reverse the transaction. Much is left to be desired as court proceedings resume soon. A theft of this magnitude can improve cryptocurrency systems if the court rules in favor of Tulip Trading Limited (TTL). While developers of Bitcoin and its altcoins might cite certain contractual agreements to excuse their business ethics, world leaders’ current standing of cryptocurrency gives the TTL a slight advantage over the developers.
Wherever this case swings, one thing is sure, it has upended the cart and many would begin to ponder on how to make crypto exchanges and developers in the industry find a way of retrieving stolen coins.
