Security experts advise on how to keep yourself and your digital coin safe from thieves that focus on the crypto-wealthy.
Criminals targeting cryptocurrency investors
Cases of thieves targeting those who have gotten wealthy from the boom in Bitcoin, Ethereum and other digital currencies are on the rise worldwide. From Phuket, Thailand, to Manhattan to the Ukraine, stories of kidnappings and even killings for access to peoples Bitcoin is becoming a staple in the world news.
Fiat currency accounts in traditional banks and other holding systems have elaborate checks and countermeasures developed over a long time against thieves. The anonymous nature of cryptocurrency though assures criminals that once they have access to and can transfer the information to their own wallets it is nearly impossible to track down their identities.
Chainalysis is a company that specializes in tracing criminal activity on the Blockchain. Jonathan Levin the founder of the company has assisted law enforcement all over the world to try and track down stolen Bitcoin and its like.
Even when a transaction can be tracked through the Blockchain ledger though the anonymous design of cryptocurrency allows criminals not to have their true identities linked to their accounts. This is where the trail goes cold and not much more can be done.
“For this [crime], the advantage of Bitcoin is that it’s hard to verify,” said Chanut Hongsitthichaikul an investigator with the Chalong Police Station in reference to the extortion case in Thailand that involved a young Russian couple who were held in their apartment by armed assailants until $100,000 worth of cryptocurrency was transferred.
The police were able to track the victim’s laptop to Kuala Lumpur where it was discarded and that was where the investigation ended.
“This is now becoming more pervasive and touching more law enforcement divisions that deal with organized crime and violent crime on a local level,”
Jonathan Levin, founder of Chainalysis.
New security being developed
Recently a group of about 170 leaders in the crypto world held a panel discussion about security in Cancun Mexico. Calling the meeting the Satoshi roundtable the group discussed how individuals could protect themselves and their holdings from crypto thieves.
One measure that came from the meetings was having a ‘duress wallet’. That is a wallet with a small amount of currency to throw thieves off the trail of larger holdings.
Overall security advisers agree one the best measures presently is to keep your holdings in a multi-signature wallet. That is a wallet that requires at least two people to sign in for a transaction to be completed and for one of those people to be off location, perhaps an attorney.
Programmers are also in the process of creating wallets with built-in stress codes. Like duress alarms in banks, these codes can be triggered to inform either private security or law enforcement directly while a person is forced to make a transaction.
Perhaps the best and easiest way to protect yourself and your crypto-currency is to keep a low profile. In at least one high profile case the robbery was perpetrated after the victim had told his friend about his newly acquired crypto-fortune.