A recent report found that the amount of crypto assets stolen in hacks more than doubled in the first six months of 2024 compared to the same period the previous year. Even after taking precautions, bad actors steal millions of dollars worth of assets a day meaning it is necessary to have a system in place to allow for asset recovery.
The BSV blockchain is the only blockchain that allows legal recourse for lost asset (token) recovery to legally rightful owners by design – a process known as Digital Asset Recovery. The same system can also freeze assets based on court injunctions and legal notices. This process enables the blockchain system to work under the same legal system that any financial system currently is subjected to in law. It also discourages any illegal activity that the open and public ledger can face by malicious actors.
Digital assets – real rights
Being able to recover digital assets is an absolute necessity, says Connor Murray (BSV Blockchain, Director of Stewardship). Speaking at the sidelines of the recent London Blockchain Conference, Murray noted that ‘Digital Asset Recovery aligns with existing rights and laws around any digital asset – including stocks, bonds, bank accounts.
‘If someone steals your funds there is a way to recover them,’ Murray said. ‘All Digital Asset Recovery does is apply what we do with every other asset and bring it to blockchain. For us, all blockchains must have some kind of (recovery) function. Otherwise, we run into this mantra of not your keys, not your coins, which means that the person who can perform the biggest cyber attack gets rewarded the most.’
By comparison, if a cyber attack occurs on the BSV blockchain there is a system in place to take the money back for the rightful owners, he said.
The Digital Asset Recovery process
Murray noted that there are effectively three parties in the Digital Asset Recovery process:
- The courts and legal system – This includes the regular court processes for establishing asset ownership.
- Token Recovery – A partner company of the BSV Blockchain.
- The BSV Blockchain – The association acts as a steward and ensures that Digital Asset Recovery is possible.
Token Recovery is committed to bringing compliance, accountability, and a solution to the industry for lost or stolen digital assets.
As a member of the Crypto Valley Association, one of the oldest and most mature organisations grouping companies in the blockchain and digital asset, and the Global Blockchain Business Council, the largest organisation in the field, Token Recovery will begin facilitating the process aimed at recovering lost/stolen digital assets on BSV blockchain.
An affected party would typically approach Token recovery first if they have been a victim of a theft or hack. Token Recovery will assess the case, conduct necessary tracing and investigations and coordinate the legal strategy aimed at obtaining a necessary legal title to the stolen assets. It is also possible that the affected party obtains the required court order themselves or with the help of other lawyers or experts. The Token Recovery team will then ensure that the party has all of the necessary documents to initiate the Digital Asset Recovery process on the BSV blockchain. This court order will then be handed over to the BSV Blockchain which will follow the requirements of the court order. It is important to note that, according to the Network Access Rules on the BSV blockchain, the assets can be frozen or reassigned only based on a court order which is valid and enforceable in the UK or Switzerland. In case of foreign court orders, they need to be first recognised in the UK or Switzerland.
Digital Asset Recovery – A Legal Necessity
Without effective mechanisms for the recovery of lost or stolen digital assets, the enforcement of property rights will remain elusive. Part of the BSV Blockchain’s stewardship delivers on the concept of Digital Asset Recovery, a protocol that aligns blockchain technology with existing legal frameworks for asset protection.
This initiative enables the recovery or freezing of digital assets in cases of loss, theft, or if they require ownership or transfer. This is essential in establishing a regulatory-compliant network and framework for digital assets, as well as for enforcement and compliance with existing property laws.
