If it's all gambled away on the crypto markets (quite likely to have happened), then it's just as gone as if on a lost address, only that some entirely unrelated market actors happened to get (temporarily) richer in the process.
But you can still track history of any coin existed.
If somebody know wallet ids of money before they were stolen, you can trace transactions to see what wallet ids they are in now.
If they say "stolen", it means that they found transactions when money were transferred from victim's wallet. And if they know transactions, then they know source and destination wallet ids.
This is close enough to true for the purposes of this discussion, but in the general case you can only reliably track the flow of funds in aggregate, not the flow of any individual "coin." If addresses A and B send equal amounts of coins to C, C sends all of those coins to D, and D sends half of them to E, you can't really track the coins from A to E or from B to E. The transaction from C to D results in a single output that doesn't distinguish between funds from A and funds from B.
Yes, but my example was contrived for simplicity, and really D can make a transaction with an arbitrary number of inputs and outputs sent to and from an arbitrary number of addresses belonging to an arbitrary number of users. This is what bitcoin mixers do. Now we have a bunch of inputs coming in, and a bunch of evenly sized outputs coming out (with some unevenly sized ones for change). You can still probabilistically track funds if a user did something like putting coins from D into a big mixing transaction with other users and then sending their mixed coins from address F though I to a single address J that just so happens to have the same balance D started with, and of course there are less contrived situations where patterns of behavior would be evident, but this is all probabilistic and you still aren't really tracking individual coins; discrete coins aren't stored on the blockchain, transactions with input and output balances are. If the missing funds are tracked, and this whole affair was the result of malevolence rather than incompetence, I'd bet they're either sitting in a bunch of tiny accounts that have been cycled through mixers more than once or they're going to be before they're spent (having faked your own death, you could see holding off on the mixer until you've had ample time to cover your trail thus giving the appearance of incompetence rather than malevolence for a while).
Plenty of coin movements in an exchange aren't going to make it onto the chain. If I sell on Coinbase and someone else on Coinbase buys it, there's no reason for Coinbase to incur fees to publish that to everyone; they can just shuffle money around on paper.
This reminds me of how chit fund scams worked in India in the 80s.
Often people in the same family(cousins etc) would invest. Always in a fashion, where one of them owed money to the fund, and the other was owed.
If the fund went underwater, they would just go to the chit fund office, and do what was called book adjustment. Basically the fund would not give anything or take anything. On paper it would appear as fund gave money to one cousin, and took from another. In reality the cousin who was supposed to get money from the fund, would get the money from his cousin. And the fund, would mark in his ledger as the debt was paid.
