As the world leader on the consumer’s side in complex payment dispute resolution, MyChargeBack receives a lot of questions from the public. Unfortunately, a number of them are based on myths and misconceptions. From credit card chargebacks to bank wire recalls and everything in between, we’ve heard it all. But few areas of finance are as inundated with falsehood as the world of cryptocurrency.
With that in mind, we are here today to bust some of the most persistent myths about bitcoin and related topics that we keep hearing over and over.
- Bitcoin is Anonymous and Untraceable
Myth: Once bitcoin leaves your digital wallet, there’s no way to ever trace where it went or who received it.
Fact: While it is true that bitcoin transactions and wallets are anonymized, tracking the transactions is possible. It’s not easy, but it can be done. How do we know? Because it’s something that MyChargeBack does all the time.
MyChargeBack’s Cryptocurrency Investigations provide our clients with a wealth of actionable information about their lost bitcoin. Our proprietary forensic tracing tools pinpoint the transaction ID for every single time your coin was transferred, as well as every single wallet address it passed through. If your bitcoin was ever cashed out, we’ll name the exchange that was used to do it. Not so untraceable any more, is it?
Such a wealth of information available moves the idea of recovering lost digital assets from the realm of fantasy to reality. Which brings us to our next misconception:
- Once Your Bitcoin is Gone, It’s Gone Forever
Myth: Bitcoin that is not in your digital wallet might as well be on the moon, or not exist at all. Recovering lost or stolen bitcoin is impossible.
Fact: Bitcoin isn’t magic. Like any other asset, if you can find it, you can get it back. This is even true of cash, and bitcoin is certainly far more traceable than cash. As we pointed out above, MyChargeBack can find it. What’s more, we walk you through the process of getting it back.
First of all, part of the Cryptocurrency Investigation mentioned above is a custom report prepared and delivered to each client. The report consists of two main sections. First, the results of the forensic trace as previously explained. Second, we create a real world action plan for the practical recovery of that specific client’s bitcoin. It may involve some combination of police reports, legal demand letters, and civil courts, and when relevant we provide our recommended language for the various letters and reports.
Second of all, aside from the above-mentioned Crypto Trace Report, MyChargeBack gets involved in a hands-on fashion with numerous bitcoin recovery cases. In addition to our unparalleled forensic trace services, we have developed best practices and personal connections in numerous jurisdictions around the world. Whenever a client feels unconfident about taking on the task all by themselves, we are ready, willing, and able to take part in the process. It’s a process that has seen surprising results, and the successes continue to pile up.
- Bitcoin is Unregulated. No Rules Apply to It.
Myth: Crypto is in the financial equivalent of the Wild West. Anything goes, and no one can get punished for any sort of nefarious activity.
Fact: One by one, the nations of the world are waking up to the bitcoin revolution. They realize that this is a new class of asset, and that allowing it to remain unregulated presents a serious risk to their citizens, the financial stability of their countries and the global financial system as a whole.
In August of 2021, Gary Gensler, the Chairman of the U.S. Securities and Exchange Commission (SEC), announced that the American government is going to be enforcing existing financial regulations by applying them very strictly to cryptocurrencies. Other countries around the world have begun doing the same thing. Some countries like Ukraine are in the midst of legislating innovative new laws to cover crypto regulation.
An even more extreme example is the small and perennially economically troubled Central American country of El Salvador which, after a couple of decades of experimenting with using the U.S. dollar as its national currency, finally went all in and abandoned all fiat currency this past September. That’s right, bitcoin is now the official national currency of El Salvador. While they may be first to go down this road, don’t be surprised if El Salvador doesn’t end up being the last.
The fact is that increasing government regulation of bitcoin is somewhat of a double edged sword. On the one hand, it definitely makes investing and dealing with cryptocurrencies more safe for the average person on the street. On the other hand, back when it was the Wild West, the average person on the street stayed away from it.
MyChargeBack is hearing from numerous clients who felt comfortable getting into the world of bitcoin only to be badly burned when things went wrong one way or another. As crypto leaves the shadows and enters the mainstream, bitcoin adoption among the general population has pulled ahead of regulation. In other words, consumer protection is falling behind consumer confidence. This has become a central plank of MyChargeBack’s advocacy as we continue to call for more government oversight, specifically from the point of view of consumer protection.
In the meantime, we will continue to see new clients approaching us for help with bitcoin-related payment disputes, and we will continue to work hard to improve their situation — both one case at a time and systematically.