Stolen funds tracing

Because public blockchains record every transfer, investigators can start from the attacker's address and map where the money goes. Analytics tools cluster addresses that likely belong to the same actor, label known services and flag the moment funds touch an exchange, a stablecoin issuer or a bridge, where real-world intervention becomes possible.

Speed matters most. Exchanges can freeze deposits that match flagged addresses, issuers such as Tether and Circle can block stablecoins at the contract level, and law enforcement can later subpoena account data. Coordinated responses after major hacks have frozen meaningful parts of the loot within hours, and tracing evidence has supported arrests and asset seizures years after the theft.

Tracing has limits. Mixers, privacy coins, cross-chain swaps and over-the-counter brokers can break or blur the trail, and clustering heuristics produce probabilistic links rather than proof. A traced address shows where funds went, not who controls them, so attribution still needs off-chain evidence.