In our previous blogs, we outlined how stolen or fraudulently misappropriated cryptocurrency can be traced using blockchaintracing. We showed how we successfully obtained multiple “freezing orders” from Dutch courts in 2023 and 2024.

A high-profile example was the case against Huobi in 2023, in which the court imposed a fine of as much as €2,000,000 to ensure that the account of the fraudulent customer was actually frozen. In summary proceedings, we ask not only for the freezing of the account of the user who is anonymous in crypto, but also for the name and address details of the owner of the account, so that we can have them ordered in follow-up proceedings to refund the crypto from the frozen account as compensation for the damages suffered.

The crucial role of the exchange

After the identification and freezing of the stolen crypto comes the next phase, which should not be underestimated: the actual recovery of the assets following proceedings against the person who received the crypto. In fraud, this is almost always a “money mule”: someone who works for the criminal organization. If the proceedings against the money mule succeed, the account must be skimmed. This again requires the cooperation of the exchange involved. Although some exchanges are willing to freeze accounts based on a court order, it is not a given that they will also cooperate in sending the crypto from the frozen account to the victim, even if the victim’s demand is granted.

The exchange can make a new assessment at this point and is not bound by the court’s judgment in the follow-up proceedings between the victim and the exchange’s customer, especially if the exchange was not a party to that case. This can lead to frustration of the recovery process.

Proactive approach through summary judgment

In order to clarify the obligations of the exchange, it is often more efficient and less expensive to settle this already during the preliminary summary proceedings, as an additional step beyond the freezing. By involving the exchange directly in the proceedings and requesting a provision beyond just the freeze, clarity on the eventual return of the stolen crypto can be obtained at an early stage.

Analysis Judgment North Holland District Court January 10, 2025 (ECLI:NL:RBNHO:2025:138)

A recent judgment by the District Court of North Holland (ECLI:NL:RBNHO:2025:138) illustrates this proactive approach. In this case, the victim of crypto theft in summary proceedings claimed not only the freezing of accounts with the exchange MEXC Global Limited, but also:

  • Disclosure: The court ordered MEXC to provide the name and address information of the users of the affected accounts, as well as information on the number and type of cryptocurrencies affected by the freeze and the movements on the accounts from the date of the theft.

  • Transfer of assets: Under the condition of transmission of a judgment ordering the person in question to pay damages to the victim, MEXC was ordered to send the assets in the account (if digital assets) and pay (if liquid assets) respectively to a crypto account or bank account of the victim.

Ensuring user rights

It is important to emphasize that the rights of the customer of the exchange are adequately safeguarded in these proceedings. Indeed, the user of the account will be summoned to the follow-up proceedings, where he will have the opportunity to defend against the claimant’s claim that he is not entitled to the stolen cryptocurrency.

Conclusion

The judgment of the District Court of North Holland shows that a proactive approach in summary proceedings, in which, in addition to freezing, the provision of information and transfer of assets are demanded, can be an effective way to recover stolen cryptocurrency. By involving the exchange early in the proceedings and imposing clear obligations, the chances of a successful recovery are significantly increased.