The surge in the trading of digital assets goes hand in hand with the rise in cryptocurrency fraud cases in the UK and around the world. One of the most common reasons for this boom in cryptocurrency fraud can be attributed to the relative anonymity, and the lack of any one centralised supervision unit. This is where forensic accounting can be invaluable. Cryptocurrency forensics experts are hugely experienced and skilled accounting professionals who have chosen to go above and beyond with their training.
Be it during a divorce/ matrimonial dispute, during a litigation, or when acting as an expert witness, getting across the intricacies and important details of a cryptocurrency investigation is vital. Due in part to its relatively new position in our society and its complicated nature for the unaware, blockchain and cryptocurrency are not, by any means, universally understood.
One of the most important aspects of a forensic accountant’s job is their ability to unearth vital hidden data and information. As mentioned above, the relative anonymity of digital assets represent an opportunity for potential scammers. However, digital currency is neither totally untraceable or completely anonymous. There are in fact a few ways an expert can link a digital wallet to the owning party. This includes examining transactions, speaking to other parties involved, analysing internet traffic history, and more.
Additionally, since all cryptocurrency transactions are recorded on the blockchain, and the most recognised names in the field (Bitcoin, Etherium, etc.) are public ledger traded (anybody within the network can see and analyse any transactions made), cryptocurrency can actually be highly useful for getting to the bottom of a forensic investigation.