There have been multiple cases of stolen Bitcoins until now and more and more exchanges fall victims to hacking. It is roughly estimated that the number of BTCs stolen so far exceeds in value $1 billion already.
Since transactions in Bitcoin are public and not quite anonymous by nature, some might have thought that they would be easy to track in case of theft or other error but because unlike conventional methods of payment, Bitcoins are not numbered or cataloged tracking their genesis becomes far trickier.
On their paper Tendrils of Crime, scholars Mansoor Ahmed, Ilia Shumailor and Rose Anderson suggest that one way of tracking the illicit transactions could be based on an algorithm known as FIFO. FIFO means First In First Out and has been used for countless of years in accounting, law and services. How it applies to cryptocurrency is that it splits each Bitcoin to satoshis and trails the information of each movements. That way it allows to see the course all the way back to the genesis wallet and assuming that foul play occurred and the first coins to get into a wallet are stolen, then the first coins spend from that wallet are considered stolen too. Perhaps if the method is perfected and some of the stolen funds are returned and/or the thieves are prosecuted, the trust in crypto can rise even higher.