If you've been following the news, you may recall reading about a director from the EXMO bitcoin exchange being abducted and held for ransom.
I wrote a little about that developing story here:
https://steemit.com/bitcoin/@jrcornel/exmo-bitcoin-exchange-manager-freed-today-by-his-kidnappers
As the story developed it became more and more clear exactly what happened.
It appears Mr. Lerner was abducted after leaving his office by a group of masked individuals. They then held him for ransom for several days until he paid them over $1 million USD worth of bitcoin.
Upon receiving said bitcoin, they released him.
This is possibly setting a dangerous precedent going forward.
On first glance, the story doesn't sound all that different than what might conceivably happen at another major financial institution to another high net-worth individual.
Where bad actors kidnap and hold for ransom.
Except this is very different.
In those cases, the money is very hard to get for the abductors and even when it is, it is somewhat traceable.
In this case, dealing with bitcoin, the bitcoins are transferred to an anonymous address and are likely never to be recovered again.
This is possibly very dangerous going forward.
What is to stop other nefarious groups from doing this exact same thing to other high crypto net-worth individuals?
The possibility of never getting paid was the big deterrent before, that and also the likely possibility of being caught.
Now both of those deterrents have largely been removed when dealing with something like bitcoin.
The coins are easy to get, and they aren't traceable once they have them.
What is to stop things like this from happening all over the world?
To be honest, I don't really have an answer.
Some of bitcoin's strongest selling points are also some of its biggest drawbacks.
What do you guys think, what can be done to prevent this from becoming common place?
Let me know your thoughts in the comment section below.
Stay informed my friends.
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Giving into crooks is always dangerous. I think kidnapping is practically an industry in some countries. It needs to be discouraged, but when lives are threatened people will pay.
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Yes, it certainly is. I feel like the anonymity of bitcoin transactions will make it more common in developed countries as well.
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To be fair, a bag with gold coins is also hard to track and probably much more anonymous than a bitcoin transaction.
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That is true, and were someone to hold a bag of gold coins worth over a million dollars at their house, they would be in the same kind of danger.
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So this is like a hardware version of ransomware?(r)
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Ha ha... actually ransomware is digital kidnapping
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That would have been something if they cut off his ear because the confirmation took 3 days
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They probably made him send a few extra coins due to the high fees. ;)
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I think it would be better idea for these kidnappers to use Litecoin BTC takes forever. Litecoin is always better even in hostage situations
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Kidnappers need to get with the times!
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Maybe I don't get it, but when people talk about the subject of taxes and Bitcoin, Bitcoin is not anonymous. If you don't pay taxes on it they will track you and figure it out. But they can't track a kidnapper. If Bitcoin is anonymous, kidnappers should not know who has the Bitcoin to pay them.
Bitcoin cannot be simultaneously anonymous and not anonymous.
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Great point. It mainly has to do with whether they will need to turn those bitcoins into local fiat currency or not. If they keep it forever in bitcoin and do transactions that way, likely never to be caught. However, if they convert it to fiat via some exchange, it gets much more tricky. Governments are mostly only able to figure out taxes owed from the fiat on/off ramps.
Though if they are willing to hold someone at gun point for a million dollars, I would imagine setting up a fake account at a currency exchange would be already in the cards for them.
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Bitcoin is both anonymous and not anonymous.
It's 100% impossible to trace an address that has never been used. It's equally impossible to trace a chain of transactions between private citizens using real bitcoin wallets ... but sooner or later the bitcoin will probably end up at some exchange, and most exchanges have KYC-routines in place, demanding to know the identity of the customer (probably that won't help much for the criminals - when the only thing that is required for identification is a scan of some ID-document,"replay"-attacks are trivial. I'm sure one can buy such copies in bulk through the "dark" markets).
I would be surprised if there doesn't exist some global "greylists" and "blacklists" of bitcoin addresses that the major exchanges and payment processors are monitoring.
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All I can say right now is wow, just wow. This topic can be so convoluted.
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It isn't anonymous by default but by moving the bitcoin through a "mixer" you can easily make it untraceable. It will be very difficult for the irs to enforce any taxes on bitcoin. Unless you have your bitcoin on an exchange it is difficult to find out who owns it.
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Mixer services basically works so that lots of people throw in their bitcoins into the service, the bitcoins are thoroughly mixed, and then paid out to the same people again. So if there is one person owning "tainted" coins and nine other persons owning non-tainted coins, in the end there will be ten persons owning tainted coins, and investigating a lead may become ten times as difficult.
Such mixer services are probably not much efficient by today; the cost is so high that probably only criminals would use it - and then the point is more or less lost.
If I had a lot of criminal bitcoins that I needed to get rid of, I would ASAP try to convert it to the less traceable currencies (i.e. dash, monero, zcash) using services like bisq, changelly, shapeshift.
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Ok, thank you. So then the only people who might be in danger of a kidnapping scenario are those who keep their Bitcoin on an exchange? If so, seems like the answer would be to keep your Bitcoin elsewhere, and to educate people to the danger of a kidnapping threat by keeping their Bitcoin on an exchange. Right?
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No. If a potential kidnapper has reasons to believe that you are wealthy and have free liquidity, you may be a potential target, that doesn't have much to do with crypto.
However, if the kidnapper receives the award and moves it to an exchange ... it's probably a high probability that a skilled police force will manage to find the criminal (depending quite much on how well the police forces cooperate internationally, I suppose the police in the country where the offence took place has to figure out which exchange the bitcoins was moved to, ask the police in the country where the exchange exists to assist, and then this police will have to ask the exchange who deposited the funds).
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High profile crypto executives will need to be careful and use some of their crypto earnings for tighter security especially in Eastern Europe and South America.
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I agree. Though I would imagine anyone sitting on $100k or more in crypto could ultimately be a target because of the likelihood of getting away with it for the criminals.
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Not only executives ... anyone being probable holders of crypto currency. I do some trading on Localbitcoins, and I've had some runs with threats like "you don't want anything to happen with your kids, do you? please send this amount of bitcoins to this address."
Then again, this can happen anyone wealthy or believed-to-be wealthy person ... even the not-so-wealthy. Anyone can be forced to pay ransoms in crypto currency - and I believe the next generation of such criminals will use currencies that are less traceable than Bitcoin. And, came to think, a bag with gold coins is probably less traceable than a bitcoin transaction.
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Yes extortion will be a problem as well. The anonymous transfer of crypto that is not reversible is a major appeal for criminals. After all, in the movies they always catch the kidnappers at the drop off...
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Pseudo-anonymous non-reversible transfer-over-distance is the new thing, yes. Earlier it was typically required with physical deliveries.
Well, I do remember we had troubles with extortion/ransoms at my previous work place - "pay up, or we'll DDoS you off the Internet". That was before Bitcoin was invented, I wonder how the payment was supposed to be arranged. Maybe a SWIFT-transfer to some country where it would be difficult to pursue to criminal.
Of course we never paid up, that would be an outright invitation for more extortion.
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Wow I haven't heard of the DDoS extortion. In the news it seems always reported for unknown reasons.
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Uh oh.. I did not know the ransom was in BTC... It seems like they should have gotten a better negotiator! Chris Voss - where are you my man?
This is a drawback of cryptocurrencies. Hopefully they are able to find out who abducted him!
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happy new yeae my friend best wishes for you.
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this why i dont want to give my name and info here.
many thugs will come to steemit soon and have access to who's has lots of steem. then they can find out who you are in an hour and where you live in a day.
be careful out there steem whales
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lovely post I would love to know more. Am new here so am going to follow you please do the same you have won my vote
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Actually I have no comment, I'm not like any other friend. who can not control his full bitcoin.🙏😁 thank you
@jrcornel
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Everything is in bitcoin these days so it's hard to trace! This world is changing more and more every year, hopefully steem goes straight to the top!
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hard to stop them, because the purpose of money, 😎😎😎
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Well it's certainly going to be an antecedent for crooks who are geniuses that's why I suggest more authentic protection of Bitcoin in which security details will entail
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I think that soon bitcoin will be banned in every country.
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Yes and you will be kidnapped by those governments they will put a gun to your head until you tell them your keys, so they can extort you. Just like the kidnappers, but then someone declared the violence, kidnapping and extortion "legal".
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Bitcoin isn't untraceable.
They've caught a number of bitcoin criminals that likely thought they were safer for using it.
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It's not untraceable in of itself, but it can be with the right know-how.
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Yeah, but you're pretty much just laundering the money. You could do the same with real money. You'd just have to find someone to do it.
Or just get on a boat and spend it in a country that doesn't track things as closely.
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Great post..
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Good post, I am a photographer, it passes for my blog and sees my content, I hope that it should be of your taste, you have my vote :D greetings
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How much dangerous is it
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Very sad to hear about this incident. Not only it affected Pavel, but also the whole crypto community. When people say cryptos are a good tool for terrorism and money laundering, they aren't fully wrong. But we are so stuck on to the decentralized and freedom words, that we have made it much more easier for the evil elements to grow. I guess in the end law of averages is what wins........
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wayment... that REALLY happened? oh S*%&#
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One million untraceable dollars on one simple kidnapping. Certainly a juicy target. When dealing with bitcoin it’s best to keep a low profile.
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This is a dangerous precedent and definitely not good for the community as a whole.. Bitcoin btw, is far more transparents.. as long as you can figure out the exit and entry points of FIat, you can follow the breadcrums using addresses... However, with privacy coins, there's no way to figure out where the money goes, and that's a serious double edged sword that could hurt the genuine community who simply want privacy when bad actors like these use the tools for nefarious activities.
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Maybe, but what can we do with ordinary people?
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