A public blockchain records every transaction permanently, which is the property that makes tracing possible at all. Funds can be moved, split, or converted, but the record of each of those actions stays visible. The work of tracing is less about finding a hidden trail and more about correctly interpreting a trail that is already public.
Grouping addresses that behave as one entity
A single theft rarely stays in one wallet. Investigators use clustering techniques, patterns in how addresses spend together or how change is returned, to group addresses that most likely belong to the same person or service, even when no single address is ever directly labeled. Over time this produces a map of behavior rather than a single line from point A to point B.
Reading the signs of deliberate obfuscation
Funds split across many small transfers, converted between assets, or routed through an additional network are common signs that someone is trying to make the trail harder to follow. None of these steps erase the underlying record. They add friction and additional hops, which is why a trace can take real time even when the destination is eventually identified.
Tracing produces a documented, defensible account of where funds went. It does not, by itself, guarantee that funds come back. That outcome depends on what happens after the trail ends at an identifiable service.
Where a trace usually leads
The end point of a useful trace is typically a regulated service, most often an exchange, where the funds were converted back to a usable form. That is the point where a well documented case and a legal request can turn a trace into something more than a record, a hold, a freeze, or in some cases, funds returned to a victim.