What institutions fail to grasp about crypto and investment fraud

What institutions cannot always grasp, and why

Crypto and investment fraud requires a kind of investigation that differs from classic fraud cases. Money flows run across countless addresses, switch coins, pass through services and jump between countries within minutes. To truly grasp such a case requires specialised knowledge and, just as importantly, time to apply that knowledge. At many institutions, that combination is scarce.

This is not a matter of unwillingness or incompetence, but of capacity. De Nederlandsche Bank supervises crypto service providers and works within strict legal frameworks, while the number of cases is rising. Anyone under that pressure cannot give every case the full attention the underlying technology demands. That can be stated without reproaching anyone.

The position of law enforcement: enough commitment, too little time

Police and law enforcement bodies are committed, but overburdened. Fully investigating a crypto case takes days of specialised work, and that time competes with a large flow of other cases. As a result, a report sometimes remains untouched, not out of disinterest, but because attention simply cannot be everywhere at once.

European cooperation helps here. Europol has long pointed out that following criminal money flows on the blockchain is specialised work. That is precisely why an institution can benefit from an independent party that delivers this groundwork, so law enforcement sees more quickly where a case leads. Read more about this investigation on our pillar page about crypto fraud investigation.

The position of banks: pressure, regulation and limited visibility

Banks work under heavy regulatory pressure and must act quickly on signals of fraud or unusual transactions. At the same time, they often have limited visibility into what happens outside their own systems on the blockchain. That is a real limitation, not a shortcoming: a bank is not an investigation firm and does not need to be.

When a bank blocks an account or asks questions about the origin of assets, a need for factual substantiation arises. What such substantiation looks like, we describe in bank blocking your account over crypto. A traceable report gives the bank a factual basis to proceed, without us promising what the bank decides with it.

In practice we also see something that is harder to name. A bank will sometimes warn a customer that a transfer shows signs of fraud, but then still carries out that transfer and does little beyond the warning. The customer has formally been alerted, yet afterwards still feels left to deal with it alone. Here too this is usually not unwillingness, but a result of fixed processes and limited room to really act on each individual case.

We see the effect of this every day: people come to us because they have come to trust an independent bureau more than their own house bank, where they have often been a customer for years. That is a worrying sign, because the bank is precisely an important link and deserves to be taken seriously on this subject. Paucitas does not want to undermine that role but to strengthen it: by recording the facts in a traceable way, we give both the customer and the bank a shared, verifiable basis to move forward.

What an independent, traceable report adds

The common thread is simple: where institutions cannot always give the time and attention, an independent investigation firm can. Paucitas maps the crypto transactions, records the origin of assets, and delivers a report in which every step is traceable. Such a report is not a replacement for the police or a supervisor, but a tool they can use to see how a case factually fits together.

Importantly, the report is reproducible and verifiable; what a crypto research report precisely entails, we explain in the glossary. That fraud figures keep rising is also clear from our discussion of the DNB payment fraud figures. A traceable report helps an institution make that flow manageable, without guaranteeing an outcome.

An open hand: Paucitas is always available

This piece is emphatically an offer, not criticism. We understand that institutions are overburdened and that a crypto case demands a lot. That is exactly why Paucitas remains available for consultation. A bank, supervisor or law enforcement body that genuinely wants to understand a case can always contact us.

We take the time and attention that the daily workload sometimes makes impossible, and deliver the factual substantiation on which an institution can proceed. A first consultation is free and without obligation; the legal or tax judgement we always leave to the competent authority or adviser.