A Manager of the Exmo Bitcoin Exchange Has Been Kidnapped In Ukraine (bbc.com)

CaptainDork shares a report from BBC: A manager of the Exmo Bitcoin exchange has been kidnapped in Ukraine. According to Russian and Ukrainian media reports Pavel Lerner, 40, was kidnapped while leaving his office in Kiev's Obolon district on December 26th. The reports said he was dragged into a black Mercedes-Benz by men wearing balaclavas. Police in Kiev confirmed to the BBC that a man had been kidnapped on the day in question, but would not confirm his identity. A spokeswoman said that the matter was currently under investigation, and that more information would be made public later on. Mr Lerner is a prominent Russian blockchain expert and the news of his kidnapping has stunned many in the international cryptocurrency community.

Comments

Someone should inform the kidnappers...

[Gravis Zero]

this is not how ransomware works. ;)

Kidnapping will be back in style

[Applehu Akbar]

This traditional form of crime has fallen out of favor in modern societies because of the increasing difficulty of making an untraceable money drop. Ransoms in cryptocurrency eliminates this problem. Now we can expect to see kidnapping's comeback in the US and Europe.

Re:Kidnapping will be back in style

[ffkom]

Cryptocurrencies do not make "untraceable money drops" more easy - on the contrary, if you transfer such money from some legitimate account to that of a criminal, every future use of that money is recorded in detail in the "distributed ledger", ready to be used for investigation now or in 30 years.

So unless your goal as a criminal is to some day die with $$$$ in some unused Bitcoin account, you have exactly the same problem of money laundering as with every other currency. Any non-criminal merchant, whether it is an sports car seller or a pizza delivery, will not have any reason to help you with hiding your association with some Bitcoin account number.

So all police needs to do is to follow back the chain of transactions from the first such legitimate merchant back to the first legal entity who would not want to reveal the source of the money, and jail them, either for money laundering, or for the theft of the money.

Re:Kidnapping will be back in style

[Applehu Akbar]

Cryptocurrencies do not make "untraceable money drops" more easy - on the contrary, if you transfer such money from some legitimate account to that of a criminal, every future use of that money is recorded in detail in the "distributed ledger", ready to be used for investigation now or in 30 years. .

If this were true, then why would there be a ransomware problem? Now that entire national healthcare systems are getting hit, intelligence agencies have a strong interest in tracing the path of ransomware payments so that the perpetrators can be quietly strangled with their own intestines as an example to their cohorts.

No, apparently all you have to do is 'tumble' coins through a few exchanges and that blockchain of custody no longer functions as a tracer.

Re:Kidnapping will be back in style

[TheRaven64]

If this were true, then why would there be a ransomware problem?

Several reasons. The first is that you don't need anonymity for ransoms, you need the perception of anonymity. Ransom demands are possible when the criminal believes that they can receive the payment anonymously, there is less of a requirement that this belief be well founded.

The second is that you actually don't really need anonymity for ransomware at all, you just need to be able to get the money past law enforcement boundaries. If, for example, I were in North Korea and released ransomware, then it wouldn't matter that everyone could see where the money went to, I'd still be safe from anyone arresting me.

The third is that tracking the money is only part of the problem. If a law enforcement organisation determines that money sent to a bank account was illegal, then they can freeze the account and they can reverse the transaction. There is no way for a third party to freeze a bitcoin account, so you can watch everything that the criminal spends money on, but you can't stop them spending it (unless you can somehow persuade everyone not to accept money from that wallet).

Finally, even without cryptocurrencies in the mix, money laundering is a thing. Bitcoin makes this relatively easy: I can send my bitcoins to an exchange, turn them into some other currency, and then take that money to another bank account and then back to an exchange and turn it into Bitcoin. Now there's no record in the public ledger that the money that I withdrew and put back on the block chain are the same. Money went into a pot and then came out again. You can avoid even that with mixer services, where you deposit an amount in bitcoin and withdraw the same amount (or a fraction less). All that the blockchain then knows is that 1,000 people each put 1 bitcoin in and 1,000 people each got 1 bitcoin out (in a different wallet, if they weren't idiots) and so there's no easy way of tying the individual money trails together. If you can get the records associated with the mixers, then you can recreate this, but there's no guarantee that they even keep useful records.

Re:Kidnapping will be back in style

[geekmux]

So unless your goal as a criminal is to some day die with $$$$ in some unused Bitcoin account, you have exactly the same problem of money laundering as with every other currency.

Since when has the "problem" of money laundering been a valid deterrent? One would think this fact would have been rather obvious to anyone looking back over the last century of crime.

Any non-criminal merchant, whether it is an sports car seller or a pizza delivery, will not have any reason to help you with hiding your association with some Bitcoin account number.

Again, look at history. People who launder money get paid for taking that risk. They do it for the same greedy reasons anyone from petty criminals to big bankers (Wells Fargo) do unethical and illegal shit; because it's often worth it.

So all police needs to do is to follow back the chain of transactions from the first such legitimate merchant back to the first legal entity who would not want to reveal the source of the money, and jail them, either for money laundering, or for the theft of the money.

The ransomware problem is not shrinking because they've made some miracle breakthrough in law enforcement. Death by 1,000 cuts was effective in growing ransomware into a multi-billion dollar enterprise because a $300 ransom makes law enforcement give a shit about as much as reporting a stolen cell phone. The same thing will continue to happen with other crimes because there's never enough law enforcement resources. This fact will establish monetary give-a-shit thresholds that will be abused.

There's also the obvious problem of legal jurisdiction, which will become a loophole as big as Ireland, a country known for hiding trillions from taxation (funny how no one wants to fix that criminal activity). If other crimes continue, it won't be long before bitcoin finds or establishes its "Ireland."

Re:Kidnapping will be back in style

[Applehu Akbar]

Your last paragraph precisely echoes my point, and explains why ransomware works. If you tumble coins through a few fast swaps of one currency for another, the blockchain no longer operates as a tracer and you can get away with whatever form of laundering you want.

How to make money out of bitcoin

[Anonymous Coward]

1) Set up a bitcoin selling site
2) Collect enormous amounts of money
3) Claim you have been hacked, kidnapped by gunmen/aliens/ZOG etc.

Re:VPN Honeypot

[GrumpySteen]

Might just have to settle for the guy being released and a few bitcoins being swiped.

Or the kidnappers might settle for killing the guy because a few bitcoins isn't worth the risk that he could identify them.

Re:"Exmo" Bitcoin Exchange

[nomadic]

They're regulated by a first-world country.