Kidnapped Crypto Exchange Executive Reportedly Paid $1 Million Ransom in Bitcoin

Photo: AP
Photo: AP

Here’s one piece of evidence to suggest that cryptocurrency remains an extremely hot commodity despite recent crashes in the price of Bitcoin: Armed gang members kidnapped a top executive at U.K.-registered cryptocurrency exchange Exmo Finance this week and only released him after they were paid a $1 million equivalent ransom in bitcoins, the Financial Times reported.

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Per the report, Exmo manager Pavel Lerner was accosted by men in dark clothes and balaclavas and shoved into a black car while near the company’s main offices in Kiev, Ukraine on Tuesday. He was freed by Thursday after giving his captors information on how to abscond with the $1 million in cryptocurrency.

“He was kidnapped by an armed gang for the purpose of extorting bitcoins,” Ukranian interior ministry adviser Anton Gerashchenko told FT. “... We have operative information that he paid more than $1m worth of bitcoins.”

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Gerashchenko added Lerner was “released in a state of shock” and “very lucky that he remained alive.”

Exmo insists all customer data is safe and previously told the BBC that Lerner’s job did not include “access either to storages or any personal data of users.” Per the BBC, the company claims to have nearly 95,000 active users—which would place it nowhere near the biggest cryptocurrency exchange in existence, but still boasting a daily trading volume in the hundreds of millions, according to FT. It’s not clear how or why Lerner happened to have a million dollars in cryptocurrency handy at the time of his capture, but reports noted his status as a well-known crypto expert.

While stealing bitcoins might seem like a good idea on paper given crypto’s high value, getting away with it could be slightly difficult given recent crackdowns on sketchy exchanges that enable users to launder ill-earned coins. However, authorities haven’t always shown an active interest in tracking down stolen cryptocurrency, and the alleged kidnappers could simply lay low until the right opportunity to exchange the stolen coins for clean crypto or something else of equivalent value emerges.

[Financial Times]

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DISCUSSION

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gramercypolice

Three hours after the victim was released, when the ransom fell to a value of $550,000 USD, the kidnappers all shot each other during a fight over what actually constituted a ‘full share’ of the take. Some said it was the value at the time of the abduction, others said it was the time of the release, still others said it was the value at the moment the Bitcoin was transferred to the kidnappers. And one guy said it was the value each kidnapper realized when he or she exchanged the Bitcoins for any legal tender.

Eighteen people were shot. Two of the kidnappers survived the ensuing gun battle and both agreed next time they would want any ransom paid in American baseball cards because “they hold their value more predictably and would lead to less infighting among our fellow kidnappers. Bitcoin is so tawdry,” one of them said.

“The good thing,” said the other surviving kidnapper, who asked to be identified only by his first name, Joe, “is that 45 minutes after we killed most of the rest of our gang, the value of our ransom went up to $8.3 million USD, so the joke is on the guys who got shot. Well, we all got shot, but I mean the guys who died.”

“But as for me,” Joe continued, “I’m getting out of the kidnapping racket altogether. Bitcoin is better suited to swatting, so I’m going to give that a try.”