Criminals are reportedly abducting the ‘cryptorich’ to steal their Bitcoin

A man uses his phone as he walks past ATM machines for digital currency Bitcoin in Hong Kong.

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A man uses his phone as he walks past ATM machines for digital currency Bitcoin in Hong Kong.
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ANTHONY WALLACE/AFP/Getty Images)

  • Groups of criminals around the world are targeting people known to be in possession of large amounts of cryptocurrencies like Bitcoin.
  • Their modus operandi usually involves abduction, which is followed by demands of ransom often north of $1 million (£715 million).
  • There are security methods that are being put in place to safeguard cryptocurrencies owner, but there is still much to be done as the threat may grow bigger.

A number of thieves across the globe are reportedly harassing – and, in some cases, abducting – people that have become rich trading cryptocurrencies like Bitcoin, according to a report in The New York Times.

One of Bitcoin’s properties is that although transactions themselves are traceable, it’s virtually impossible to identify the two parties involved.

If criminals manage to successfully extort someone into making a Bitcoin payment to their own wallet, it’s close to impossible to link the receiver to an actual person, as the system grants full anonymity.

The New York Times report mentions a number of attacks that have recently occurred in countries such as Thailand, Turkey, Ukraine, and Russia – but also Canada, the US, and UK – where people known to possess large sums of cryptocurrencies were forced to make payments to wallets of criminal organisations.

“This is now becoming more pervasive and touching more law enforcement divisions that deal with organized crime and violent crime on a local level,” Jonathan Levin, founder of Chainalysis, told the NYT. (Chainalysis is a firm that has worked with several law enforcement agencies on virtual currency crimes.)

Law enforcement bodies can track the computers used to make the transaction, and sometimes the help of video footage helped them identify the attackers in the past. But if such elements are absent, as soon as the money transfer is completed there’s very little that can be done.

There are a number of protections that the so-called “cryptorich” are adopting, however. Some of them are hiring security teams to stay outside their houses and make sure that they can’t be harassed in any way. But the real protections are themselves digital.

One such method is the “multisignature,” which requires multiple approvals before a money transfer is granted. In that case, simply forcing an individual to hand over their digital key to make a transaction would be pointless.

Others are instead thinking about “duress wallets,” which would hold a small amount of credit and be secretly swapped with the primary wallet by the victim at the moment the actual transfer is taking place.