Immediate Global Crisis Management Essential For Targets of Large-Scale Crypto Fraud

When large-scale cryptocurrency fraud or cyber-attacks hit, the stolen crypto can quickly be dispersed across the globe, with perpetrators hard to find. This means the decisions a target makes in first hours and days are key – a speedy, global response, combined with non-traditional asset recovery methods, can help.

November 16, 2023

Speed delivered through global coverage is key for targets of large-scale cryptocurrency fraud or cyber-attacks.

If you find yourself the target of a sophisticated, large-scale attack, the decisions you make in those first hours and days can mean the difference between a swift, impactful return of assets and years of costly litigation regardless of whether you are a crypto/blockchain company, fund, or exchange.

Cryptocurrency's pseudonymous and borderless nature may mean perpetrators are difficult to identify, and proceeds can be transferred, aggregated, and splintered across the world within minutes. If targets are to recover what belongs to them successfully, they need to act as quickly and globally as their perpetrators – and traditional litigation-only strategies are ineffective means that will only slow them down.

However, you can mitigate losses and increase the odds of achieving substantial recovery by carefully strategizing with counsel and working with a globally integrated team trained in blockchain forensics and crisis management. 

A Better Path to Cross-Border Recovery

Oftentimes, acting from an urge to limit the damage, companies make impulsive decisions that end up imperiling their recovery chances: For example, they may instinctively reach out to local law enforcement agencies before developing a compelling narrative or advocacy position and having a multijurisdictional strategy, or neglect reputational concerns until it is too late.

Instead, companies need to take a globally holistic – and sometimes unorthodox – approach to address the unique issues related to the large-scale theft of digital assets, as well as take advantage of growing interest in cross-border collaboration in major jurisdictions such as the UK and Hong Kong. These include, but are not limited to:

• Taking a globally integrated approach through fast-moving development of actionable intelligence and leveraging of jurisdiction-specific tools, such as Norwich Pharmacal relief in England, Hong Kong, the BVI or the Cayman Islands, which can obtain key intelligence without tipping off the wrongdoer;
• Considering cross-border asset recovery tools to recover property, beyond just looking at enforcing claims for after-the-fact damages;
• Deploying discreet tools, such as blockchain forensics, and reputation management strategies to protect the company’s privacy; and
• Boosting the chances a government will use its vast sovereign powers – which can often extend across borders – in assistance.

When you realize that you have become the target of a large-scale theft or cyberattack, you need to make a quick decision on how to proceed. In many cases, deploying cross-border, nontraditional strategies aimed at recovering your specific assets in targeted, speedy and discreet ways can yield the most benefit in the shortest amount of time. Choosing a response team that includes counsel with cross-border reach may be key to mitigating the damage, recovering key assets and, ultimately, returning to your normal operations.

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About Kobre & Kim

Kobre & Kim is a global law firm focusing on cross-border disputes and investigations, often involving fraud and misconduct. The firm:

• Focuses on helping clients recover misappropriated assets in challenging cross-border scenarios, realize value from claims in a host of legal and jurisdictional contexts, and develop investigative, enforcement, and asset tracing/recovery plans in the pre-dispute stage to maximize future monetization.
• Often works with other law firms as special counsel in cases beyond those primary counsel’s geographic reach to recover assets worldwide with our integrated team of former government lawyers, Hong Kong solicitors and solicitor-advocates, UK solicitors and barristers (including King’s Counsel) and offshore lawyers.
• Maintains our independence as advocates ready to litigate against virtually any institution by avoiding repeat client relationships, and the conflicts of interest that come with them.