
Exmo Bitcoin exchange chief executive kidnapped in Kiev - boto3
http://www.bbc.com/news/business-42505261
======
55555
Unfortunately, one of the 'killer apps' for crypto is extortion. It's going to
change the world and not for the better.

The hard part of extortion has always been getting paid. It's always involved
exposure ("meet me there with a bag of money") or been subject to limitations
(wire transfer clawbacks, cash withdrawal limits, etc), until now.

Right now anyone in the world can fill an insulin syringe with cyanide
solution, walk into supermarkets (too big to properly secure, and there's too
many supermarkets to prevent it), and inject it into random plastic coke
bottles. People will stop drinking coke, and then Coca-cola will be willing to
pay hundreds of millions of dollars to make it stop. Ten years ago, the
extortionist would then have to meet somewhere to collect a bag full of money,
and that's where the risk comes in. But now they can simply send coca-cola a
bitcoin address and get paid anonymously risk-free. You can design extremely
profitable low-risk crimes.

The question then becomes, if more people were given the ability to steal
risk-free, would they? Anyone who has spent time in the crypto ecosystem has
already learned the answer. They will. This is why nearly every exchange gets
'hacked' and so many darknet vendors pull exit scams. It turns out a lot of
the reason most people are good all the time has more to do with fear of
getting caught than virtue.

The world is about to become a very scary place.

Be the change that you wish to see. Money won't make you happy.

~~~
cma
For something as large scale as that coke scheme bitcoin could always
implement clawbacks via consensus.

~~~
Meekro
There are several fully-anonymous altcoins in use today. The crooks would use
one of those instead.

~~~
EGreg
What is the guarantee that some random extortionist is going to stop just
cause you sent them money?

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whiskers08xmt
The chance that someone would send him money a second time is very small, and
the act of terrorism comes with risk of getting caught. If the extortionist is
in it for the money, it doesn't make sense to continue the same scheme. It
might make sense to start a new scheme, however.

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zzzcpan
It is possible that it was done by a corrupt secret service (SBU), that
recently started raiding people involved with crypto currencies in Ukraine and
stealing their coins. The ForkLog guy was not afraid to speak up [1]

[1] [https://cointelegraph.com/news/ukraine-security-service-
alle...](https://cointelegraph.com/news/ukraine-security-service-allegedly-
raid-forklog-confiscate-tech-and-funds)

~~~
qaq
There are huge conglomerates in Ukraine operating in Crypto, gambling, porn,
ransomware etc. Could be just some rivals attacking competitors (and paying of
SBU to do the bidding is fairly realistic option)

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jameslk
So it appears criminals are getting wiser and a new wave of home and personal
robberies may emerge. Will this push crypto owners to entrust their currency
with more secure institutions, leading to these "decentralized" currencies to
be once again under control and manipulated by banks and governments?

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freeloop3
It doesn't matter if you own crypto or not. The mere existence of it creates a
threat for every relatively rich person out there. They can simply coerce your
family to buy bitcoin and give them some, on threat that they kill you.

~~~
gst
> The mere existence of it creates a threat for every relatively rich person
> out there.

For every rich person that openly shows their wealth.

~~~
jackvalentine
I'm sure it's not impossible to find 'under the radar' rich people - and
people who take care to not flaunt their wealth will probably be more likely
to try and make the whole thing go away quietly by paying up.

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aviv
I raised this concern in a comment last week. We are going to see more
instances of this. Remember how in the movies they break into a bank manager's
house and hold the family captive while someone goes with the manager to open
the bank vault?

Same thing is inevitably going to happen IRL. I always say exchangers are
Bitcoins weakest link. All it takes is one compromised employee at Coinbase or
another large exchanger (intentional or some kidnapping scenario) for the
price to come crashing due to the damage they can be forced to do.

Never ever keep your coins on an exchange wallet. Never.

~~~
busterarm
How many of these kidnappings are going to be faked to provide cover for a
theft?

It's exactly the thing I would do.

~~~
staplers
"We've been hacked" has been a cover for exchanges stealing funds for years
now.

~~~
emerged
Oops our servers couldn't keep up right at the point in time when this coin
exploded/plumetted.

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provost
Wow, this is awful. I've met coin exchange directors, and one of them
mentioned to me that this was a topic of concern within their management.
Specifically that their families might be targeted too. I don't know anything
about Mr. Lerner, but hopefully the police will find him safe, soon.

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logfromblammo
Mathematical basis for Bitcoin still compromised by "rubber hose"
cryptanalysis.

Let this be a reminder that physical security is a necessary precursor to
computer security. And I also hope that Exmo's succession plan executor takes
the precaution of staying up late tonight to move all their reserves to new
wallets.

~~~
ImSkeptical
That will be a brutal task, knowing that doing it ensures your colleague will
get tortured and be unable to stop the torture by giving up the bitcoins.
Still, probably for the best.

~~~
ringaroundthetx
Yeah hopefully assailants will also be educated in the futility of their
actions

If the whole idea of a kneecap-breaking plot fails because transferring the
funds requires multiple signers then they arent going to break kneecaps

~~~
ImSkeptical
Agreed, it would still be a tough task to complete.

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TeeWEE
The weak spot of Cryptos is in the exchanges. Getting your money in or out of
crypto is a reall hassle, and a risky undertaking. I still had some money at
Exmo, moved them to Ether to send them to Kraken (and in my own wallet
eventually). However the ethereum transaction is still in "Verifying status".
Normally I always keep my cryptos in cold storages, but you cant want you want
to exchange them for cash.

I also tried to get my Euros out of Exmo, but verification is already taking
more than a week. My trust is gone in them. And thats the whole point.
Exchanges are still based on trust, thats not what decentralized cryptos are
about. It only works if everybody works on the blockchain only.

~~~
gst
For crypto-crypto exchanges you can use trustless atomic swaps. For crypto-
fiat just use a reputable exchange that operates in your local jurisdiction.

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m3kw9
The Winkofloss brothers stores their codes right to prevent these type of
kidnappings. They distributed the keys across states and bank vaults.

~~~
jordanbaucke
winklevoss? Distributing keys doesn't prevent you from having a few "digits"
(no pun intended) removed. "Oh you can't get them? Call the other key-holders.
Better hope they like your fingers as much as you do."

~~~
jordanbaucke
In "Casino" Robert De Niro's character puts $2M in jewels in a safe-deposit
box that even he doesn't have the key for (he naively gives the key to his
wife- but that's another part of the plot) He narrates that the jewels are "in
case he got in trouble". Ostensibly so he could pay off kidnappers.

~~~
chrissnell
I have the "poor man's" version of De Niro's safe-deposit box, a Rolex
Submariner. Readily convertible into US$3-5K cash (at least) in pretty much
any large city in the world. It's always on my wrist. If I needed the money
desperately and couldn't access my accounts, I have my beloved watch.

~~~
DonHopkins
I'd rather not know what time it is than wear a Rolex. I would be self-
conscious about people thinking I was that vain and materialistic, assuming
it's fake, and that I was a poseur. Get a money belt if your point isn't just
to show off and you're not asking to get rolled.

~~~
jorde
Unless you go for the yellow gold or two-tone (gold/steel) models, 95% of the
people won't no that you're wearing a Rolex. Regular Submariner or Datejust is
pretty nondescript and doesn't scream Rolex at all. Only other watch nerds
will notice.

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monkmartinez
A few more stories like this and governments (militaries) will be
"activated"... both physical and digital, if they haven't been already.

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solotronics
what do you mean?

~~~
mschuster91
Quite likely that governments will force exchange operators to get appropriate
security. Hell if I had the keys (or were in a position to be used as
"leverage" for them in a kidnapping) to a Bitcoin exchange, I would surround
me with a bunch of ex-military guards.

~~~
mooneater
Now (depending on the country) how do you trust the ex-military guards, if
what they are guarding is worth far more than their salaries?

~~~
larrykwg
While that sound smart and plausible, I would assume that there is some
solution to that problem, otherwise how would private security work at all?

~~~
ceejayoz
A security guard selling the Mona Lisa has to figure out how to get rid of it.
Bitcoin's quite a bit easier in that regard.

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NiklasMort
update: [https://www.theguardian.com/uk-news/2017/dec/29/ukraine-
kidn...](https://www.theguardian.com/uk-news/2017/dec/29/ukraine-kidnappers-
release-hostage-after-1m-bitcoin-ransom-paid)

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lafar6502
Or all bitcoin gone together with the boss. Nobody knows if kidnappers weren’t
just a coverup

