by Robert Eastick, Director, Crypto Investigator (and former Detective Sergeant) at iSanctuary, to raise awareness during International Fraud Awareness Week: 15th-21st November 2026
Banks don’t need to offer cryptocurrency services to be exposed to crypto fraud. As criminals look to move money between traditional banking systems and blockchain networks, financial institutions increasingly need to understand what happens beyond the transactions they can see.
This November, International Fraud Awareness Week (15–21 November 2026) brings businesses, government agencies and educational institutions together to promote fraud prevention, education and stronger internal controls. This is why it’s important to consider the need for banks to look beyond their own payment systems when investigating financial crime.
As cryptocurrency becomes embedded in the wider financial ecosystem, the ability to trace funds across both traditional and digital financial networks is becoming an important part of fraud investigation. Banks often focus on suspicious payments, but rapidly developing crypto fraud issues are creating a need to better understand where money goes after it leaves their systems, plus how it might return and where from.
A two-way relationship between traditional banking and crypto fraud
The relationship between traditional banking and cryptocurrency fraud works in two directions. Customers can be deceived into transferring money from their bank accounts to cryptocurrency exchanges or wallets controlled by criminals. However, equally, funds generated through criminal activity can move through blockchain networks before being converted back into conventional currency and deposited into bank accounts. In both of these scenarios, banks can become part of the fraud journey, even if they have no direct involvement in cryptocurrency services.
Financial institutions have invested significantly in fraud prevention, from transaction monitoring and customer verification to payment warnings and suspicious activity reporting. However, these controls do not necessarily provide visibility of what happens once funds move outside the traditional banking environment. For example, a customer might authorise a payment to a legitimate cryptocurrency exchange, believing they are investing in a genuine opportunity. The money is subsequently transferred through multiple wallets, potentially across several blockchain networks, before reaching an unknown beneficiary. By the time the victim reports the fraud, the original payment record only establishes the first stage of a much longer transaction journey. In the case of Smithers v Persons Unknown & Others, £10.5 million was invested and lost to this type of cryptofraud, with a complex case and investigation required to trace and return the funds via the courts.
The challenge in these types of cases is to establish what happened after the payment is made. This requires investigators to connect conventional banking records with blockchain transaction data, alongside intelligence about the individuals, businesses and wallet addresses involved.
Alongside the immediate financial loss, banks may face negative impacts such as customer complaints, reimbursement considerations, increased investigative costs, reputational damage and potential financial-crime compliance implications. In the UK, reimbursement protections for authorised push payment (APP) fraud have also increased the importance of understanding the circumstances surrounding payments, although the applicable requirements depend on the payment method and circumstances.
The Financial Ombudsman Service can, for example, consider whether a bank should have identified unusual or suspicious payments involving cryptocurrency providers, even where specific APP reimbursement rules do not apply.
What specialist investigation can establish
When cryptocurrency is involved, identifying where the money has initially been sent is only the starting point. Banks and investigators need to establish where the assets moved, who may control them and whether there are realistic opportunities to pursue recovery. This is where specialist financial and blockchain investigation becomes important.
Despite many people believing that blockchain transactions are untraceable, they provide a permanent record of activity. However, interpreting that information requires specialist knowledge. Investigators will need to examine transaction patterns, follow the movement of assets between wallets and identify potential connections with exchanges, services and other entities. This intelligence can then be considered alongside conventional financial records, open-source intelligence and other evidence to help establish who may be involved.
For organisations such as iSanctuary, which specialises in cryptocurrency investigations and financial intelligence, the objective is to build an evidence-led picture of what happened. Combining investigations expertise with proprietary technology to find out where funds went, whether they can be linked to identifiable individuals or organisations, and what options might remain available.
Importantly, tracing assets does not automatically mean they can be recovered. Cryptocurrency may have passed through multiple wallets, been swapped for other assets, or end up in exchanges in other jurisdictions. Even where assets are identified, freezing and returning them can require appropriate legal grounds, court orders or cooperation from exchanges, law enforcement and other relevant parties.
A thorough investigation should help establish whether recovery action is possible, what evidence is needed and whether pursuing it is commercially and legally proportionate for the organisation.
What banks should have ready before the next incident
The effectiveness of an investigation often depends on how quickly the right information and expertise can be brought together. Banks should consider whether their existing fraud response processes are equipped to deal with incidents that cross between traditional finance and cryptocurrency, with three important areas to address.
- Establish clear internal escalation routes
Fraud, anti-money laundering, compliance and legal teams should all understand when a suspected incident involving cryptocurrency requires specialist investigation. Waiting until an investigation has stalled can mean that valuable opportunities to gather evidence and identify assets are lost.
- Preserve relevant information early
Payment records, transaction references, customer communications, account details and any wallet addresses supplied by victims can all help establish the initial movement of funds. Ensuring this information is captured and retained promptly gives specialist investigators a stronger starting point.
- Build the right external relationships
Investigations involving cryptocurrency frequently require cooperation between banks, specialist investigators, legal advisers, cryptocurrency exchanges and law enforcement. Understanding the appropriate channels for lawful information-sharing and potential recovery action before an incident occurs can help avoid unnecessary delays during a live case.
Specialist investigative partners can extend a bank’s internal capabilities, providing access to blockchain analysis, financial intelligence and asset-tracing expertise that may not be required on a day-to-day basis.
Financial crime and cryptocurrency fraud isn’t an isolated risk
Cryptocurrency fraud should not be viewed as an isolated risk for digital asset businesses. It is part of a wider financial crime landscape in which money can move between conventional banking systems and blockchain networks, and with increasing complexity.
Whilst banks may not offer cryptocurrency services, they do need to understand the level of risk involved when their customers, accounts or payment infrastructure become part of crypto-related fraud.
International Fraud Awareness Week is a timely reminder that effective fraud prevention requires more than internal controls. It requires investigative readiness, specialist expertise and collaboration across the entire financial ecosystem. Ultimately, banks need to be prepared to follow the money beyond the payment, because that is often where the most important part of the investigation begins.