Crypto Crime Spills Over from Behind the Screen to Real-Life Violence
As the value of cryptocurrency surges, law enforcement agencies are seeing a disturbing trend emerge from behind computer screens and into the real world. Allegations of kidnapping, torture, and ransom plots have brought crypto crime out of the shadows and into the spotlight.
According to John Griffin, a finance professor at the University of Texas in Austin, who tracks financial crimes, "I think this kind of physical violence is a natural manifestation of the emboldened nature of crypto activities." He adds that such violent acts are becoming more common as people involved in cryptocurrency-related crimes feel empowered by the anonymity and relative lack of regulation surrounding these transactions.
Just recently, two American crypto investors, John Woeltz and William Duplessie, were arrested on kidnapping and assault charges after a 28-year-old Italian man accused them of torturing him for weeks to obtain his Bitcoin password. The case is another example of how cryptocurrency-related crimes are now often linked to real-life violence.
In Washington D.C., 13 people have been indicted on federal charges, accused of combining computer hacking and money laundering with old-fashioned impersonation and burglary to steal more than $260 million from victims' cryptocurrency accounts. Some individuals are accused of using sophisticated tactics such as hacking into websites and servers or stealing hardware wallets containing cryptocurrency databases.
Another notable case occurred in France, where kidnappings of wealthy cryptocurrency holders and their relatives have become common ransom plots. For instance, the father of a crypto entrepreneur was kidnapped while walking his dog and received videos showing his severed finger demanded by attackers as ransom for millions of euros. Police eventually freed him, arresting several suspects.
The FBI's 2024 internet crime report reveals nearly 860,000 complaints of suspected internet crime with a record $16.6 billion in reported losses - an increase of 33% compared to the previous year. These figures are dominated by cryptocurrency thefts, which account for more than $6.5 billion in reported losses.
Experts point to the crypto underworld being fueled by large amounts of money at stake combined with weak regulation allowing transactions to be made without identity documents. "As long as there’s a viable route to launder or liquidate stolen assets, it makes little difference to the offender whether the target is a high-value watch or a crypto wallet," says Phil Ariss, director of UK public sector relations at TRM Labs.
"Cryptocurrency is now firmly in the mainstream, and as a result, our traditional understanding of physical threat and robbery needs to evolve accordingly." The increasing use of violence in cryptocurrency-related crimes highlights the urgent need for better regulation and awareness to combat these crimes effectively.