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Luke Brookes / © Culture Trip
Luke Brookes / © Culture Trip

Around the World, Abductions of the 'Crypto Rich' Are on the Rise

Picture of Claire Lancaster
Tech & Entrepreneurship Editor
Updated: 27 February 2018

Physical attacks that target those who are newly rich off the back of crypto-currency investments are on the rise around the world.

Thieves are reportedly intimidating, harassing and even abducting the so-called ‘crypto rich’, forcing victims to make payments into their own crypto wallets.

Ironically, the anonymity and decentralisation that attracts many people to digital currencies is leaving investors vulnerable to crime, as thieves are also able to remain anonymous. On top of that, there is no central bank or government to halt or reverse digital currency transfers once they’ve occurred, leaving victims without recourse.

 A Bitcoin ATM machine in Vilnius, Lithuania | © Valda Kalnina/EPA-EFE/REX/Shutterstock

A Bitcoin ATM machine in Vilnius, Lithuania | © Valda Kalnina/EPA-EFE/REX/Shutterstock

‘As Bitcoin has become more valuable, Bitcoin-related crime increasingly includes theft of other individuals’ holdings,’ reads a recent report from Chainalysis, a New York City-based firm that has worked with several law enforcement agencies on virtual-currency crimes.

The spate of recent attacks have taken place everywhere from Thailand to Florida.

In Ottawa, thieves attacked the Canadian Bitcoin exchange, while an Ether investor in New York City and a Bitcoin trader near Oxford, England, were made targets, among others.

In Ukraine, thieves abducted Pavel Lerner, the Russian president of UK-based virtual currency exchange Exmo. Lerner was released after a few days following a $1 million (£717,000) ransom payment reportedly made from his personal crypto accounts.

While law enforcement is occasionally able to identify crypto thieves from surveillance videos capturing the crimes, ‘the changing nature of cryptocrime will require new approaches by law enforcement and increased vigilance against thefts and scams by Bitcoin users,’ reports Chainalysis.

Until the law catches up, a handful of investors are devising security measures of their own, from hiring private security to arming themselves.

At the end of last year, US-based crypto investor Jameson Lopp shared a video of himself firing a semi-automatic weapon on his property, along with the message ‘Bitcoin security pro tip: protect your software with hardware.’

The New York Times reports that Lopp and others are also turning to digital solutions including the ‘multisignature’ method, which requires approvals from multiple people before a transaction can take place. Alternatively, some are looking into ‘duress wallets’, which are counterfeit Bitcoin wallets that hold a small fraction of the victim’s actual online wealth.

While the majority of crypto-theft still happens online through scams, ransomware and hacks, the development of physical and digital crypto security is seen as a priority for many investors. Chainalysis reports that digital Bitcoin theft has risen from at least $3 million in 2013 to $95 million in 2016.

Want to learn more about the rise of crypto currency? Find out why digital currencies are taking off in South America