This has something to do with bitcoin too. This kind of theft would never happen in legacy financial system where each account have a clear ownership registration by the banks, and supervised by regulators. So the fraudulent payment will always be reversed by the banks. However bitcoin is like cash, once bitcoin moved to another address, it is like cash being stolen, there is almost no way to trace it back
That's also the reason large banks are refusing to do bitcoin related business. If it really works like cash, then all those regulations around cash might apply to bitcoin: Daily withdraw limit, maximum number of cash allowed in one transaction etc...
You would think so, but that's not how the world works. What you are basically suggesting is that no fraud whatsoever can occur in the banking system because of how regulated it is because regulatory agencies can just reverse transactions. Take a look at history. It is ripe with thousands of cases of banking scams and fraud that were never recovered from. Especially when you are involving foreign banks, with foreign laws and regulations. There is so much red tape involved in getting such large wires reversed. Once the money is sent overseas, it's basically gone. Foreign banks will always put their account holders first, instead of taking orders from another banking institution outside of their country.
The only way such foreign banks would reverse transactions would be through a court order, from their country of residence. Wire Transfers may be traceable to account holders, but when you start involving multiple foreign countries and multiple unassociated accounts, the money is as good as gone. It can take YEARS to get effective court to get any kind of action, and by then the money is long gone, and likely is any evidence. Not to mention building a case and presenting evidence to the notion that there was fraud/scam involved, IN (possible multiple) foreign countries.
After you exceed more than 2 or 3 bank transfers beyond the initial fraud, that money will likely never be recovered. You'd be dealing with multiple parties/shell bank accounts. The party that is at the end, has nothing to do with the past 2 owners of the money. Can you imagine if someone spent a couple millions of dollars to your company, you gave them the product, they disappear with it, and then agencies try to take your money saying the 3rd to last owner stole it? There's no way on earth in any court system would get behind that.
