Late at night, Mr. Li sat in front of his computer, his brows furrowed. He felt anxious because he discovered that his cryptocurrency worth millions had vanished without a trace. Everything happened so suddenly that he was caught off guard. Li Ming recalled the years he spent in the virtual currency market, witnessing the boom and turmoil of the market, and he was aware of the risks of losing cryptocurrency. However, when it all happened to him, he felt an unprecedented sense of helplessness and despair.

In recent years, virtual currency has rapidly risen globally, attracting countless investors and speculators. However, as the market develops, the risks of losing cryptocurrency assets have also come to light. From exchange risk control to judicial freezes at home and abroad, from theft of software and hardware wallets to forgetting recovery phrases and passwords, large amounts of cryptocurrency disappear in the digital world every year, causing significant losses to many in the crypto community. According to relevant statistics, in 2023, over 1 billion dollars in cryptocurrency assets were frozen and unable to flow.

Exchange freeze

Cryptocurrency exchanges are often frozen due to violations of exchange rules or engaging in arbitrage activities. Users may trigger the exchange's risk control system when performing high-frequency trading or large withdrawals, resulting in frozen assets. There are also cases of funds flowing into marked addresses being frozen.

Additionally, some small exchanges have gone bankrupt due to mismanagement, leaving users unable to withdraw their assets.

Judicial freeze at home and abroad

Judicial agencies at home and abroad may also freeze cryptocurrency exchanges for various reasons. Such situations often involve transnational crime investigations, leading to longer freezing times for user assets and more complex unfreezing processes. Severe consequences or prolonged periods without resolution can lead to direct deductions of cryptocurrency assets.

In 2023, a cryptocurrency exchange located in Europe was jointly investigated by multiple judicial agencies for involvement in transnational financial crimes, resulting in the freezing of assets for a large number of global users. Users had to face lengthy legal procedures and uncertainty.

Scammed and stolen

Fraud is a major ailment in the cryptocurrency field. From simple phishing websites to complex Ponzi schemes, investors can lose everything with just a slight mistake. In early 2024, a cryptocurrency fraud case involving multiple countries was exposed, with victims worldwide and losses amounting to hundreds of millions of dollars.

An investor received an email that appeared to be from a well-known cryptocurrency exchange, stating that there was an anomaly with his account and that he needed to click a link for verification. Without careful discernment, he clicked the link and entered his account information and password. As a result, his account was quickly hacked, and a large amount of cryptocurrency was stolen.

Lost wallet and forgotten password

The security of both software and hardware wallets should not be overlooked. Recovery phrases and passwords are key to accessing cryptocurrency assets; once lost or forgotten, it means the assets cannot be retrieved. Statistics show that billions of dollars in cryptocurrency assets are lost each year due to lost recovery phrases or forgotten passwords. Many investors ultimately lose their assets permanently because they did not properly safeguard their recovery phrases or set overly complex passwords.

Loss in cross-chain transfer

Cross-chain transfers, as an emerging method of cryptocurrency transfer, enable asset movement between different blockchain networks. However, due to high technical complexity, there are certain risks involved in the cross-chain transfer process. When users conduct cross-chain transfers, if they operate improperly or choose an unsafe cross-chain bridge, it may lead to asset loss.

Opportunities related to the recovery of frozen cryptocurrency assets

In our years of engaging in various dispute resolution services, including finance, credit, unfreezing, and debt, we often encounter various difficult problems. Our slogan is: 'Solve problems that others cannot solve,' 'Do what others cannot do.' We do not do business for a lifetime; we do business with people for a lifetime. This has been our advantage to this day. So far, we have also gained a batch of benefited old clients and channel brothers.

However, in June 2023, a channel brother in the cryptocurrency community contacted us, saying that one of his clients had 48 ETH (Ethereum) frozen at an exchange, equivalent to about 610,000 CNY, which had been frozen for 9 months.

During face-to-face communication with clients and inquiries about the situation, after verifying the exchange's ownership and the client's identity, we signed an unfreeze agreement.

With the strong cooperation of the client, we logged into a certain exchange, identified the specific reason for the freeze, and negotiated with the exchange. After two months of effort, the exchange finally lifted the freeze on the client’s account, allowing the client to successfully withdraw the assets (of course, we won't elaborate on the unknown factors and the logic behind the unfreeze), and our efforts were richly rewarded.

From then on, based on existing experience, we began research and analysis in the field of cryptocurrency asset freezing, listing solutions for various freezing scenarios. To date, we have successfully helped dozens of clients unfreeze assets.

Of course, the cooperation of the holder is extremely important when encountering cryptocurrency asset freezing.

After a year and a half of optimization, by 2025, the recovery of frozen cryptocurrency assets business is expected to account for a large portion of our business. Although it is a niche market, it shares similarities with our old business and possesses the market characteristics we need: 'Large amount, large profit, low competition, low cost.'

On risk prevention of cryptocurrency assets

In addition to recovering assets after the fact, we must place greater emphasis on risk prevention. Beyond learning about cryptocurrency asset security, we need to enhance awareness and provide self-protection consciousness.

Do not trust, do not click, do not disclose

Recovering frozen cryptocurrency assets is a complex and severe issue, involving multiple aspects such as law, technology, and regulation, and has a high threshold.

Here, I hope every cryptocurrency enthusiast can protect their cryptocurrency asset security.

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