"What I never understand, is that if this is true, how can entire bitcoin depositories be raided (digitally) and they lose millions of $ in Bitcoin. Surely if this is all traceable then stolen bitcoin can be identified, and then treated/recovered as stolen goods."
Here's the workflow. An exchange stores its coins in a wallet. A good exchange uses a bunch of wallets, just as a bank uses multiple vaults in different places. A bad one may only use a few ones containing all the value. In order to transfer coins for the customers, the private keys for the wallets need to be on a trading system; if you use humans for security on each transaction, the exchange doesn't get customers because it would take hours to start a transaction.
If an attacker steals a private key to one of those wallets, they can authorize any transaction from it. They do that and transfer all the coins to their wallet. The problem now is that, although the blockchain tells you where the money has gone, it doesn't tell you who controls that place. A wallet address is just a cryptographic value. Setting one up is anonymous and takes a few seconds. Anyone can watch that address to see what it does, but they can't just take the coins out. If the thief uses the coins in some way that identifies themselves, law enforcement may locate them and force them to turn over the private key. If they take efforts to hide where the coins are going, they may not be located.
Stolen cryptocurrency may be converted into other types which are harder to track. It can be tumbled, which means that a system will chop up the value from multiple people and distribute it into a bunch of new wallets so you don't know who has it. It can be used to purchase things which won't report to law enforcement (E.G. buying stolen credit cards in order to use those to fund purchases). In those cases, the problem is identifying who has the currency.
Biting the hand that feeds IT
