First, identify who owes the money and where the money is
The contracting party, the website brand, the actual receiving account and the person controlling the wallet may not be the same entity. Registration materials, account-opening notices, payment instructions, statements, transaction hashes and debt confirmations should be organized to establish a timeline for each payment. On-chain records can prove the movement of assets, but the correspondence between addresses and legal entities, and whether a payment was a deposit, an exchange payment or an entrusted settlement payment, often still require other evidence.
Evidence should not be limited to a few messages selected because they are favorable to one's own side. Complete conversations, original attachments and the corresponding transaction records are more conducive to explaining the timing of quotations, authorization, performance and breach, and also help lawyers identify defenses the other party may raise. For on-chain analysis reports, a distinction should be drawn between transfer facts that are clearly visible and inferences about address attribution, and the basis for the inferences should be retained. Speculation must not be written as established fact in order to strengthen a claim, otherwise it may undermine the credibility of litigation or give rise to other disputes.
Recovery routes should be designed around assets and jurisdiction
Where there is an arbitration clause, the validity of the clause, the seat of arbitration and the location of the property should be examined; the New York Convention provides a framework for the recognition and enforcement of foreign awards, but procedural issues and grounds for refusing enforcement still exist. For litigation routes, court jurisdiction and cross-border enforcement need to be analyzed. The procedural rules of England and Wales permit applications for interim relief such as freezing orders, but evidentiary and procedural conditions must be met, and a cross-undertaking in damages may be involved. The availability of such tools does not justify promising that a freeze will definitely be obtained or that recovery will definitely be achieved.
Hypothetical scenario: a demand to top up before assets can be unfrozen
Assume that the upstream party refuses to settle and further demands an additional "deposit" before releasing funds. The contract and the basis for the restriction should be verified first, rather than continuing to pay solely on the basis of chat promises. If there are indications of fraud, criminal reporting or reporting to the relevant authorities may be assessed, but reporting does not replace the exercise of civil rights, nor does it guarantee that law enforcement will recover the full amount of a commercial debt. Where a lawful freeze is involved, a distinction should also be drawn between lifting the restriction and seeking to hold the upstream party liable.
Rank urgent objectives in order of priority
First protect unaffected client funds and original evidence, then verify limitation periods, the urgency of preservation measures and asset leads, and subsequently choose appropriate routes such as negotiation, litigation, arbitration or filing a claim in bankruptcy. In external communications, avoid accusing specific individuals without verification, and do not purchase services that claim to be able to hack wallets or guarantee recovery of coins. The cost budget should include investigation, translation, local counsel and enforcement work, and milestones should be set for adjusting strategy in light of new evidence.
Recommended actions
- Immediately export contracts, complete communications, account records and on-chain records, and preserve the original files and timestamps.
- Prepare a list of the debtor entities, known assets, dispute resolution clauses and deadlines.
- Verify the basis before making any additional payment, and have counsel in the relevant jurisdiction assess interim measures and enforcement costs.
This content is for general information only and does not constitute legal advice. Please consult a qualified lawyer about specific matters.
References
- Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) — United Nations Commission on International Trade Law (UNCITRAL)
- Civil Procedure Rules Part 25: Interim Remedies and Security for Costs — UK Ministry of Justice / Civil Procedure Rules of England and Wales
