Earlier this month, the father of a wealthy cryptocurrency entrepreneur was abducted in Paris while walking his dog. The attackers, wearing balaclavas, forced him into a van, later severing one of his fingers and sending a video of the mutilation to his son alongside a demand for millions of euros in ransom.
The incident joined a growing list of violent crimes in France linked to crypto wealth. Victims have included a prominent entrepreneur and his wife who were held hostage, a man doused in petrol, and a child targeted in an attempted abduction.
As fear spreads within France’s crypto community, some industry figures are accusing the EU’s landmark digital asset regulations of exposing holders to greater risk. Their concerns centre on the transparency requirements, which could make it easier to track down crypto owners. However, other insiders argue that the EU rules make a convenient scapegoat.
Stanislas Barthélemi, president of the French crypto lobbying group ADAN, told the New York Times this week that the rules may inadvertently have put holders in danger. By creating a traceable digital footprint, he said, criminals could potentially monitor blockchain activity to identify wealthy targets.
Alexandre Stachchenko, director of strategy at French crypto exchange Paymium, echoed the concern. He said the industry “wants to be discrete and anonymous,” but EU law “tells us it’s criminal.”
Yet others in the industry dispute the claim that the EU’s regulations have played a role in the surge in attacks.
‘Strategic deflection’
Marit Rødevand, CEO & co-founder of Norwegian anti-money laundering firm Strise, said there was “little evidence” of a connection between the union’s rules and crypto kidnappings.
“While it is easy for champions of crypto to postulate that the increased physical attacks on those operating in the space are a product of regulations, this is both reductive and a strategic deflection away from legitimate security concerns,” she said.
According to Rødevand, it is just as likely that information about potential targets was accessed through hacks, social media exposure, or publicity. Many crypto entrepreneurs are also prominent influencers.
Christopher Whitehouse, a crypto expert and solicitor at London-based law firm RPC, also made no connection. Instead, he said those holding high amounts of cryptocurrency were “obvious targets.”
“The recent surge in crypto-motivated kidnappings in France is alarming but not surprising,” Whitehouse told TNW.
He noted that cryptocurrencies have several features that make them attractive for ransom. They can be transferred instantly, are difficult to trace if moved by sophisticated criminals, and lack the safeguards of traditional bank accounts. Traditional currency, in contrast, can be tracked via serial numbers.
Exploiting human vulnerability
The recent violence in France, while brutal, is also not anything new. According to data compiled by crypto security advocate Jameson Lopp, over 200 physical attacks against Bitcoin and cryptocurrency holders have been reported since 2014. Some have been fatal.
Matt Green, head of blockchain technology disputes at London law firm Lawrence Stephens, contends that the violence boils down to criminals exploiting the weakest link in the crypto chain: people.
“The only thing stopping criminals [from] gaining access is human error or force, so kidnapping aims to break down the integrity of that human-led security,” he told TNW.
To protect themselves, some high-wealth crypto holders have beefed up their personal security, including hiring bodyguards.
Green suggests another layer of protection: multisignature wallets, a type of crypto wallet that requires multiple users to perform certain tasks, such as making transfers.
Just as some shops display signs saying no cash is kept on premises, crypto holders would do well to make it clear that a single individual cannot access funds, Green said.