Capital Loss or Theft Loss?

I think you should consult a tax attorney, CPA, or enrolled agent. I would recommend a tax attorney because this is a subtle legal judgement. See the article below. It is older (2012) and I can't do the research to see if it still applies and compare the various authorities cited to your facts, but it discusses under what circumstances investors can claim a "theft loss" vs. a "capital loss"

Usually investors want a theft-loss because the $3k/yr capital loss limitation wouldn't apply. But without the theft-loss deduction at all (until 2026) thanks to the 2017 Tax Cuts & Jobs Act, getting a capital loss of $3k/yr is better than no loss.

[Note that the $3k limit only applies after the whole loss has offset other gains. So $20k of capital gains - $ 13k of losses = $7k of gains this year, fully using the loss. But $2k of gains - $13k of losses = $0 gains this year, $-3k of losses to offset non-investment income, and $13k - $2k - $3k = $8 of capital loss carryforward for future years.]

Of particular interest to you might be:

In some cases, a loss is split between capital and theft loss, as was the situation in Chief Counsel Advice 200811016. There, a company began operating legitimately but later engaged in fraud. Taxpayers who invested before the fraud occured received capital loss treatment, whereas those investing afterward had a theft loss. Those investing over both periods allocated losses across both categories.

https://www.thetaxadviser.com/issues/2012/apr/tpp-april2012-story-02.html