Part 4 of 5 – From Trace to Freeze

From Trace to Freeze: Turning On-Chain Evidence into Recoveries

This post is informational and not legal advice. Always work with qualified counsel in the relevant jurisdictions.

TL;DR

Once you’ve traced funds, speed and precision matter. Package clean evidence, pick the right legal lane (civil, criminal, or both), and hit exchanges/custodians with a properly framed freeze request while counsel pursues court orders. Below is the exact playbook we use at BlockDivers.

1) The Objective: Convert Intel into Leverage

On-chain forensics by itself doesn’t get money back. You need:

• Attribution (who controls the destination or who can compel them),
• Jurisdiction (where you can get orders enforced), and
• Leverage (freezes, disclosure orders, or negotiated settlement).

2) Build the “Freeze Packet”

This is the bundle you send to exchanges/custodians and attach to legal filings.

Contents checklist

• Narrative one-pager: what happened, when, how much, key addresses/txids, where the funds are now.
• Evidence appendix:
  • Transaction graph (hops, amounts, timestamps).
  • Address list (CSV) with labels, chains, and balances.
  • Screenshots of exchange deposit addresses or custodian tags (if visible).
  • Any KYC/leads (ticket numbers, prior emails).
• Chain-of-custody note: who produced the trace, tools used, hash of exported data.
• Contact & authority: victim/counsel contact, complaint/report numbers (if already filed).
• Relief requested: hold/freeze, preserve logs, notify legal.

Tip: Keep it concise. The person reading first is usually trust & safety, not a blockchain sleuth.

3) Choose Your Lane: Civil, Criminal, or Hybrid

Criminal (law enforcement)

• Pros: subpoenas/search warrants; stronger preservation powers; potential international cooperation.
• Cons: timeline uncertainty; may prioritize criminal case over swift restitution.

Civil (your counsel)

• Pros: speed; you control the clock; remedies tailored to recovery.
• Cons: you fund it; you must pick the right jurisdictions/defendants.

Hybrid is common: counsel drives injunctions/disclosure while a criminal complaint adds pressure.

4) Remedy Map (pick the right tool for the venue)

(Examples; names vary by jurisdiction—counsel will localize them.)

• Emergency freeze / TRO (U.S.) — Temporary Restraining Order, then preliminary injunction under Rule 65 to freeze assets at named platforms.
• Norwich Pharmacal / Bankers Trust (UK & common-law) — Compel platforms to disclose KYC/flow info about wrongdoers.
• Mareva / Worldwide Freezing Order (UK, SG, others) — Freeze assets globally; powerful but requires strong evidence and undertakings.
• 18 U.S.C. § 1782 discovery (U.S.) — Get U.S. discovery “for use” in foreign proceedings; great for exchange KYC/logs.
• Preservation orders / Anton Piller (select jurisdictions) — Preserve evidence or seize with strict safeguards.

Strategy: Disclosure first if identity is unknown; freeze first if assets are visibly parking at a compliant custodian.

5) Exchange & Custodian Escalation Ladder

1. Trust & Safety / Legal inbox (often listed in help center).
2. Abuse/Compliance portal (some have “law enforcement only”—your counsel can access via legal@).
3. Counsel-to-counsel letter: cites applicable laws, attaches the Freeze Packet, and notes imminent court relief.
4. Court order service: TRO/injunction with specific wallet IDs and time bounds.

Email template (trim as needed)

Subject: Emergency asset freeze request — [Chain] [Amount] to [Exchange] deposit address
Hello Compliance Team,
We request immediate temporary restriction and log preservation for the assets listed in the attached packet.
Summary: [Date], [Amount + asset], source txids, destination address (your platform), current balance/tx hash.
Relief requested: place a temporary hold, preserve KYC, IP, device and withdrawal logs, and coordinate with our counsel.
Our counsel will follow with a [TRO/Disclosure] application in [Jurisdiction] within [X] days.
Contact: [Counsel name, firm, phone/email].
Regards,
[Your Name], BlockDivers

6) Evidence Quality Rules

• Be reproducible: same trace should be reproducible from public data; export CSV + PDF graphs and hash them.
• Time-stamped: include UTC timestamps; show blocks/heights and txids.
• No leaps of faith: annotate mixers/bridges as probabilistic unless you have deterministic links (e.g., direct deposit tags).
• Separate analysis from advocacy: mark facts vs. inferences.

7) Cross-Chain & Obfuscation Tactics (what still works)

• Bridges & swaps: tag each hop; many bridges keep observable pool addresses; follow ins/outs per block.
• Mixers & peel chains: track exit timing & value-matching; look for consolidation to exchange hot wallets.
• NFTs & obscure assets: watch for sale-for-ETH “laundering”; marketplaces can still be subpoenaed.
• Privacy coins: pivot to off-ramps (exchanges, OTC desks, merchant processors) rather than the chain itself.

8) Timelines & Expectations

• Hours–days: T&S acknowledgement; soft holds if you present a credible packet.
• Days–weeks: Civil orders (TRO → prelim) or § 1782 subpoenas; initial disclosures.
• Weeks–months: Funds return or settlement; else litigation path continues.

9) Common Pitfalls (and how to avoid them)

• Over-claiming certainty: “Likely via mixer” ≠ “proven.” Label it correctly.
• Sending a novel: compliance teams won’t read 30 pages—lead with one-pager.
• Ignoring jurisdiction: don’t file where you can’t enforce. Pick venues where the custodian sits.
• Waiting for LE to do everything: parallel civil action preserves momentum.
• No post-freeze plan: define how assets get repatriated (escrow, address whitelisting, settlement terms).

10) BlockDivers Approach (what we do differently)

• Fast triage (24–48h): confirm traceability and viable venues.
• Two-track pressure: compliance escalation and counsel-driven relief in the right court.
• Negotiation lens: many cases end in structured settlement once an effective freeze and disclosure land.
• Reporting you can file: court-ready exhibits, hashed exports, and declarations.

Handy One-Pager: Freeze Packet Outline

• Case title, amount, assets, chains
• Visual: 1 graph (entry → current location)
• Table: addresses, txids, timestamps, balances
• Ask: “temporary hold + preserve logs”
• Legal: counsel details, intended relief, jurisdiction
• Appendices: CSVs, screenshots, hashes