The blockchain is a public record
Most cryptocurrencies, including Bitcoin and Ethereum, run on public blockchains. Every transaction — which address sent how much to which address, and when — is permanently recorded and visible to anyone.
What the blockchain doesn’t show is who controls each address. That’s why crypto is better described as pseudonymous than anonymous.
Following the funds
Tracing starts from a known transaction — for example, the payment you made to a scammer. From there, investigators follow where the funds went next, and next again, building a map of the flow.
Scammers try to make this harder by:
- Splitting funds across many wallets
- Swapping between different tokens
- Moving funds between blockchains using ‘bridges’
- Using mixing services designed to obscure the trail
Analytics tools help identify patterns and known services, but every important link should be checked by an investigator before it’s relied on.
Why exchanges matter
The key moment in many traces is when funds reach a centralised exchange or another regulated service. These services usually verify their customers’ identities.
Investigators can’t access exchange records themselves — but police, courts and lawyers can request that an exchange freeze funds or disclose account information. A clear, documented trace is what makes those requests possible.
The limits of tracing
- Some privacy-focused coins and techniques make tracing very difficult.
- Funds may be cashed out through services that don’t cooperate with authorities.
- Time matters: funds at an exchange can be moved again quickly.
- Tracing shows where money went. Recovery depends on others acting on that evidence.
This guide is general information, not legal or financial advice. Every case is different — for advice on your situation, speak to a qualified professional.
