Hi everyone, I lately been thinking about a worst-case scenario of the following situation: If a crypto wallet that’s linked to your KYC identity (like one tied to a KYC exchange) gets hacked and you lose for example your phrases, what can you actually do about it? Even if there’s no money in it, a hacker could still use it for sketchy stuff, and because it’s linked to your verified identity, that could come back to you.
Is there any way to prove that the wallet is no longer under your control? Can you flag it or disconnect it some how ?
If there is a hack of the exchange, then you have nothing to worry about, even if the hacker uses coins for dubious purposes.
Usually hackers will cover their tracks through mixers and other similar services.
If suddenly someone gets access to your non-custodial wallet with KYC, then it is better to report it to the police.
But most people use non-custodial wallets without KYC, so you may be asked questions if you have not declared cryptocurrencies or cryptocurrencies are prohibited in your country.