Pavel Nyashin
RIP Pavel Nyashin, Russian Bitcoin trader who was beaten and robbed for his Bitcoin and later murdered in May 2018.

Massachusetts armed home invasion

A Bitcoin trader, who runs a virtual currency exchange associated with Localbitcoins, was robbed at gun point in his home by two men who demanded he turn over Bitcoin and cash. The home invasion took place in Massachusetts in the early morning of July 6th, 2018. The two suspects were later caught and arrested by state police. It is believed that they staked out the home before, and were aware that the home owner operated a cryptocurrency exchange. The home owner, Austin Nedved, managed to run out the front door and call police.

23 year old Bitcoin kid killed

Earlier this year, a well known Bitcoin trader and prominent blogger in Russia named Pavel Nyashin, who often boasted about his Bitcoin wealth online, was violently beaten and robbed of $425,000 in Bitcoin in Russia. His apartment was trashed and his computer equipment stolen. He then took to Youtube and used the incident of what happened to him to raise awareness of the risks of violence to those in the Bitcoin community. He was later murdered in Russia, perhaps because he was vocal about what happened to him and filed a police report, although some people believe he committed suicide.

In the first six months of this year there was an increase of double the number of violent attacks against executives of digital currency exchanges and traders, since 2017.

Exchange executives are at high risk for extortion (and kidnappings)

Cryptocurrency exchange owners and key executives, particularly those who have some visibility, are increasingly at high risk for thefts, violent home invasions and extortion attempts.

Unfortunately, some digital currency executives do not always take security red flags as seriously as they should. For example, in a recent case I heard of in Canada, a new employee of a cryptocurrency exchange pressured at least one person at the digital currency exchange for the address of the CEO – she went so far as to pretend to be single and hit on a friend of the CEO to get an invitation to the CEO’s house for his address. Such deceptive tactics are not uncommon because the reality is that for criminals to rob an exchange, or its CEO for the corporate assets under management, they need access. They can only get access if they first know how to locate him/her.

Sometimes risks can occur by accident that expose cryptocurrency exchange executives. The founders of a virtual currency exchange in the U.K were kidnapped, tied up and robbed of Bitcoin in their home – they were located because their lawyer made public filings for their company using their home address, which isn’t advisable.

 A Bitcoin developer on Github has described over 28 instances of extortion and physical violent attacks on virtual currency executives and traders in the last three years. There are not similarly, such attacks on CEOs of banks.

Here is a sample, below:

  1. New York – February 20, 2015, Bitcoin trader, Dwayne Richards was robbed and stabbed by two men who were after his Bitcoin.
  2. New York – February, 2015, Bitcoin trader, Dean Katz, was robbed at gun point for $12,000 in Bitcoin.
  3.  Florida – July 27, 2015, Bitcoin trader, Steve Manos, was robbed at gun point for $28,000 in Bitcoin.
  4. Toronto – August 14, 2016, a Bitcoin purchaser was robbed and stabbed by teenagers while buying Bitcoin.
  5. Brazil – February 26, 2107, the Wife of the founder of the Brazilian cryptocurrency exchange CoinBR, was kidnapped at gun point by six men outside her child’s daycare and held for several days during which time thieves demanded a ransom of $29 million in Bitcoin.
  6. New York, November 4, 2017,  a Bitcoin trader was kidnapped at gun point, shoved into a van and forced to give his kidnappers access to his wallets whereby the criminals then went to his home and stole $1.8M in Ethereum.
  7. Istanbul, November 15, 2017,  a Bitcoin investor who led an extravagant online lifestyle was stalked, kidnapped and robbed of $3.5M worth of Bitcoin by a gang.
  8. Ukraine, December 26, 2017, an employee of a U.K virtual currency exchange, Pavel Lerner, was kidnapped at gun point by six men and released after three days after the exchange paid $1M in ransom.
  9. Russia,  January 14, 2018, Bitcoin trader and blogger, Pavel Nyashin, who often boasted about his Bitcoin wealth, was beaten and robbed of $425,000 in Bitcoin. He was later murdered in Russia.
  10. Thailand, January 15, 2018, Bitcoin investor, Maxsim Latsoka, was kidnapped at gunpoint by a gang of Russians in Thailand and forced to pay $100,000 in Bitcoin.
  11. Hong Kong, January 18, 2018, a Bitcoin trader was robbed of HK 1.4 million while he was attempting to buy Bitcoin.
  12. Ottawa, January 23, 2018, a virtual currency exchange that operated out of an apartment was robbed, unsuccessfully, at gun point.
  13. England, January 27, 2018, the owners of a cryptocurrency exchange were the victims of a home invasion. One was tied up while the other was forced to transfer an undisclosed amount of Bitcoin at gun point to the robbers.
  14. Taiwan, February 21, 2018, a Bitcoin trader was assaulted while conducting a trade with several men and forced to transfer 18 Bitcoin to them.
  15. Russia, February 23, 2018, a cryptocurrency developer and ICO founder, Yury Mayorov, was beaten, mutilated and forced to transfer over $1M in Bitcoin to robbers on the streets of Moscow.
  16. Florida, April 11, 2018, a Bitcoin trader, Ryan Rice, was attacked during a Bitcoin deal over $30,000 at a Whole Foods store and shot one of the robbers in self defense.
  17. Dubai, April 25, 2018, two brothers trying to buy $1.9M of Bitcoin were attacked and robbed by a gang of ten men and were forced to hand over their cash to them.
  18. Austria, June 19, 2018, a couple was attacked in their home, tied up and forced to transfer $250,000 in Bitcoin to robbers, who posed as mailmen to enter the house.

Red flags: 

Its important to know and be able to recognize red flags when they occur, as well as to mitigate risks. The true story of the new employee, above, who befriended another person for the express purpose of obtaining the address of an executive of a virtual currency exchange, is a red flag in the world of corporate security but there are others, including;

  • Being followed home or to hotels;
  • Customers coming to an exchange for non-transactional reasons or for multiple nominal transactions;
  • Employees asking for access to employment records;
  • Employees accessing systems without authority;
  • Meetings that are suggested for trades at locations with public wifi access; and
  • Customers attempting to form friendships with employees to gain intel.

Often Bitcoin executives are stalked by other vehicles before a kidnapping. You should look for signs of surveillance such as:

  • Illegally parked vehicles;
  • Occupied parked vehicles;
  • Vehicles that move with you;
  • Vehicles that pass, then park;
  • Vehicles signaling for turns but which do not turn; and
  • The same vehicle day after day, particularly if occupied.

If you think you are being followed, circle the block or change directions several times to confirm the surveillance. Let the surveillants know you have seen them, but do not provoke them. Learn to be alert to events that could signal the start of a plan to stop your car such as workman stopping your car, an unusual detour, a fake police or government checkpoint or an accident in which your car is deliberately struck.

If other unusual things happen, such as employees or third parties seek access to addresses or other personal information about the executive team and do not have authority for that info let the company know and consider filing a notice with the police.

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