Crypto Exchange Executive Released After Paying Ransom in Bitcoin

A UK cryptocurrency exchange executive was kidnapped in Ukraine this week. And the ransom, yes, you guessed it right. The kidnappers asked for more than $1 million worth of Bitcoin. The crime was dubbed as “bitcoin kidnapping and extortion”.

Pavel Lerner, executive of Exmo exchange and a cryptocurrency expert was kidnapped near his office in Kiev on Tuesday. Fortunately, Lerner was freed Thursday after paying the ransom.

According to Anton Geraschenko, a Ukrainian adviser mentioned that “he was kidnapped by an armed gang for the purpose of extorting bitcoins”. He also added that “we have operative information that he paid more than $1 million worth of bitcoins”

Geraschenko said that Lerner was held for one and a half days and “he got very lucky that he remained alive”.

Exmo Finance is registered in the UK. It also operates in Ukraine and is just among the 400 other unregulated currencies around the globe looking to capitalize on the demand for cryptocurrencies. Exmo also has around 900,000 users as of December 2017 based on the information on their website.

Unclear Who Paid the Ransom

Though Lerner has been released, it was unclear who exactly paid the ransom. Lerner’s work at EXMO never involved access to the cryptocurrencies of their clients. In addition to this, the company mentioned that their platform is operating normally.

In a statement released by the company, they mentioned that “he is safe and there was no physical harm inflicted on him”. In addition to this, they mentioned that “nevertheless, Pavel is currently in a state of major stress, therefore, he will not provide any official comments in the coming days”.

Attacks on Digital Currency Exchanges

One of the things that attract individuals and organizations running illicit activities to cryptocurrencies is the fact that it can be converted into cash anonymously. Since it is still relatively new, digital currencies still lack regulations worldwide.

And with soaring prices of Bitcoin and other digital currencies, it isn’t surprising how criminals have targeted cryptocurrency exchanges. This isn’t the first time criminals have targeted exchanges. In fact, cybersecurity attacks are quite common these days. YouBit, a South Korean cryptocurrency exchange lost 17% of its total digital holdings and was forced to file for bankruptcy.

You also have Mt. Gox, a Japanese cryptocurrency exchange that was forced to declare bankruptcy in 2014 after a hacker moved hundreds of thousands of bitcoins from the exchange into his account.

However, despite the possibility of hacks, cryptocurrencies have soared in 2017. Bitcoin, Ethereum,  Litecoin, Bitcoin Cash, and even Ripple recently have all experienced their shining moments despite these reports, In fact, digital currencies are now worth more than $600 billion.

Could these occurrences worsen in the near future given the popularity of Bitcoin and other cryptocurrencies? Are we going to see more hacks in the coming year and even possibly more kidnappings that involve cryptocurrencies being used as ransom to culprits?

Despite the presence of blockchain forensics, it is undeniable that digital currencies still have its anonymous appeal especially for those who are behind criminal activities.