A Manager of the Exmo Bitcoin Exchange Has Been Kidnapped In Ukraine (bbc.com) 82
CaptainDork shares a report from BBC: A manager of the Exmo Bitcoin exchange has been kidnapped in Ukraine. According to Russian and Ukrainian media reports Pavel Lerner, 40, was kidnapped while leaving his office in Kiev's Obolon district on December 26th. The reports said he was dragged into a black Mercedes-Benz by men wearing balaclavas. Police in Kiev confirmed to the BBC that a man had been kidnapped on the day in question, but would not confirm his identity. A spokeswoman said that the matter was currently under investigation, and that more information would be made public later on. Mr Lerner is a prominent Russian blockchain expert and the news of his kidnapping has stunned many in the international cryptocurrency community.
obligatory XKCD (Score:1, Insightful)
https://xkcd.com/538/
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Someone should inform the kidnappers... (Score:5, Funny)
this is not how ransomware works. ;)
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maybe, but given the funds he likely has access to this may be far more profitable than ransomware!
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The fun part is what's about to happen to the price of Bitcoin.
Kidnapping will be back in style (Score:5, Insightful)
This traditional form of crime has fallen out of favor in modern societies because of the increasing difficulty of making an untraceable money drop. Ransoms in cryptocurrency eliminates this problem. Now we can expect to see kidnapping's comeback in the US and Europe.
Re:Kidnapping will be back in style (Score:4, Informative)
So unless your goal as a criminal is to some day die with $$$$ in some unused Bitcoin account, you have exactly the same problem of money laundering as with every other currency. Any non-criminal merchant, whether it is an sports car seller or a pizza delivery, will not have any reason to help you with hiding your association with some Bitcoin account number.
So all police needs to do is to follow back the chain of transactions from the first such legitimate merchant back to the first legal entity who would not want to reveal the source of the money, and jail them, either for money laundering, or for the theft of the money.
Re:Kidnapping will be back in style (Score:5, Insightful)
Cryptocurrencies do not make "untraceable money drops" more easy - on the contrary, if you transfer such money from some legitimate account to that of a criminal, every future use of that money is recorded in detail in the "distributed ledger", ready to be used for investigation now or in 30 years. .
If this were true, then why would there be a ransomware problem? Now that entire national healthcare systems are getting hit, intelligence agencies have a strong interest in tracing the path of ransomware payments so that the perpetrators can be quietly strangled with their own intestines as an example to their cohorts.
No, apparently all you have to do is 'tumble' coins through a few exchanges and that blockchain of custody no longer functions as a tracer.
Re:Kidnapping will be back in style (Score:5, Informative)
If this were true, then why would there be a ransomware problem?
Several reasons. The first is that you don't need anonymity for ransoms, you need the perception of anonymity. Ransom demands are possible when the criminal believes that they can receive the payment anonymously, there is less of a requirement that this belief be well founded.
The second is that you actually don't really need anonymity for ransomware at all, you just need to be able to get the money past law enforcement boundaries. If, for example, I were in North Korea and released ransomware, then it wouldn't matter that everyone could see where the money went to, I'd still be safe from anyone arresting me.
The third is that tracking the money is only part of the problem. If a law enforcement organisation determines that money sent to a bank account was illegal, then they can freeze the account and they can reverse the transaction. There is no way for a third party to freeze a bitcoin account, so you can watch everything that the criminal spends money on, but you can't stop them spending it (unless you can somehow persuade everyone not to accept money from that wallet).
Finally, even without cryptocurrencies in the mix, money laundering is a thing. Bitcoin makes this relatively easy: I can send my bitcoins to an exchange, turn them into some other currency, and then take that money to another bank account and then back to an exchange and turn it into Bitcoin. Now there's no record in the public ledger that the money that I withdrew and put back on the block chain are the same. Money went into a pot and then came out again. You can avoid even that with mixer services, where you deposit an amount in bitcoin and withdraw the same amount (or a fraction less). All that the blockchain then knows is that 1,000 people each put 1 bitcoin in and 1,000 people each got 1 bitcoin out (in a different wallet, if they weren't idiots) and so there's no easy way of tying the individual money trails together. If you can get the records associated with the mixers, then you can recreate this, but there's no guarantee that they even keep useful records.
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Your last paragraph precisely echoes my point, and explains why ransomware works. If you tumble coins through a few fast swaps of one currency for another, the blockchain no longer operates as a tracer and you can get away with whatever form of laundering you want.
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A billion dollars would challenging to launder, unless you can buy T bills with it as a foreign government like they do with China. I bet they don't worry too much about whether that money is legal or not.
http://ticdata.treasury.gov/Pu... [treasury.gov]
For a few million just head to Zurich, buy a portfolio of watches, put the watches in a safe deposit box, come back a year later, sell the watches and take your cash.
You can't put money in a Swiss bank unless you can prove where it came from, but you can put property in a s
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Hmm, I didn't know what a 'proof trade dollar' was. Turns out you can get a lot of value into a small amount of space
http://www.ebay.com/bhp/proof-... [ebay.com]
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Of course, science informs that high energy particles from the Sun sometimes alters parts of the blockchain, forming a mutation called a fork.
Re: Kidnapping will be back in style (Score:2)
Because ransomware takes advantage of jurisdictional hurdles by operating from foreign countries. You can't kidnap someone who's in another country.
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Sure, but then look at all the cases of ransomware that have no discernable geographic destination.
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The blockchain may be an immutable ledger, but it still appears easy enough to launder cryptocurrencies. Whether this laundering is fully effective, I have no idea- but clearly the bad guys believe it to be so, which is all you need for malicious behavior to manifest.
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So unless your goal as a criminal is to some day die with $$$$ in some unused Bitcoin account, you have exactly the same problem of money laundering as with every other currency.
Since when has the "problem" of money laundering been a valid deterrent? One would think this fact would have been rather obvious to anyone looking back over the last century of crime.
Any non-criminal merchant, whether it is an sports car seller or a pizza delivery, will not have any reason to help you with hiding your association with some Bitcoin account number.
Again, look at history. People who launder money get paid for taking that risk. They do it for the same greedy reasons anyone from petty criminals to big bankers (Wells Fargo) do unethical and illegal shit; because it's often worth it.
So all police needs to do is to follow back the chain of transactions from the first such legitimate merchant back to the first legal entity who would not want to reveal the source of the money, and jail them, either for money laundering, or for the theft of the money.
The ransomware problem is not shrinking because they've made some miracle breakthrough in
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Sometimes the payment is not getting shot.
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"With Bitcoin having actual value as opposed to fiat currencies"
That's a fat lie, which is why you posted as AC. Bitcoin appeared out of nothing. Fiat currencies at least have something backing them, be it gold, oil, or some other usable tradeable commodity.
Re: Kidnapping will be back in style (Score:2)
Really? What's the tradable commodity backing the USD?
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A multi trillion dollar military defense complex.
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This person's never heard of the petrodollar. That's fucking rich coming from someone with a lower UID than mine.
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President Trump, who knows more about taxes than any CPA, will sign an executive order mandating that ransom payment blocks embedded in the chain be coloured blue.
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Kidnapping is OK as long as you don't post it on the Intertoobz.
Then it becomes a sex crime.
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Getting kidnapped from the ukraine sounds like (Score:1)
a good way OUT OF the ukraine, so he shouldn't look a gift horse in the mouth.
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Found the American!
(FWIW, at least one person had raglan sleeves).
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"Goldman Sachs" investment bankers.
Why do people give their money to these? I'm really curious.
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They're regulated by a first-world country.
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...which makes me even more wary of dealing with them.
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Oh no they didn't, carry on.
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Being involved in a "scandal/crisis" isn't necessarily a crime. A lot of what they did was immoral, but it wasn't illegal.
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That is beside the point, you mentioned being regulated as a reason your money wouldn't be swindled, but it didn't help.
Causing the crisis is a bit different to 'being involved in' one too.
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What? I thought their main branches were in London & New York.
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Why do people give their money to these? I'm really curious.
Simple: The Bitcoin network can only handle 3 transactions per second.
People are setting up 'exchanges' so that people can pretend to buy/sell bitcoins in real time instead of waiting several days/weeks for their transactions to be processed.
Re: "Exmo" Bitcoin Exchange (Score:2)
Days or weeks? That's FUD. Add a proper fucking fee, you cheap bastard.
Just another day in Ukraine (Score:2)
Nothing to see here.
How to make money out of bitcoin (Score:3, Interesting)
1) Set up a bitcoin selling site
2) Collect enormous amounts of money
3) Claim you have been hacked [google.com], kidnapped by gunmen/aliens/ZOG etc.
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The whole point of a Bitcoin exchange is to skip the global blockchain (which is too slow for most people).
VPN Honeypot (Score:2)
Instead of terminating his VPN access, Exmo should redirect his logon to a separate honeypot server whose wallet database only has a handful of keys that add up to a few dozen bitcoin. Lerner can lie and say "yep that's everything, we covered it up due to embezzlement" or say "they must've revoked access to the database except for this one old backdoor database they forgot about" and hopefully they'd let him off with that. And of course the other exchanges have been notified ahead of time to blacklist those
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Might just have to settle for the guy being released and a few bitcoins being swiped.
Or the kidnappers might settle for killing the guy because a few bitcoins isn't worth the risk that he could identify them.
Re: Expect battle royale as soon as coin tulips wi (Score:1, Insightful)
I'm guessing your day job is fiction writer
not surprised (Score:2, Funny)