連線雜誌：encryption富豪更容易被綁架？

Authored by: Joel Khalili, Wired magazine journalist

Compiled by: Luffy, Foresight News

A well-dressed security guard is talking on a walkie-talkie

In the early hours of January 21st, David Balland and his wife were forced into separate vehicles by armed kidnappers outside their home in the luxurious Loire Valley town of Meung-sur-Loire, France. A prosecutor stated that the kidnappers’ target was Balland, one of the co-founders of the cryptocurrency wallet company Ledger, and the kidnappers’ aim was to demand a ransom.

The kidnappers conveyed their demands to Éric Larchevêque, another co-founder of Ledger, though law enforcement has yet to disclose the specifics. To force the other party to pay the full ransom, they cut off one of Balland’s fingers. In response to the kidnapping, the French authorities sent more than 200 police officers to investigate.

On January 22, the police rescued Balland from a residential area in the nearby town of Chatoulou. Later, they found his wife in the back seat of an old truck, bound but unharmed.

Paris prosecutor Laure Beccuau spoke about these events at a press conference on January 23 and in subsequent reports. Beccuau claimed that authorities have arrested ten individuals suspected of being involved in the kidnapping case. She said that these individuals face charges of “torture, cruel behavior, and extortion”, and if convicted, they will face a maximum life sentence.

Ledger has declined to comment, citing ongoing investigations and the need to protect Balland’s privacy. Ledger CEO Pascal Gauthier tweeted on X (formerly Twitter): ‘Balland and his wife have been released, and we are deeply relieved.’

Coincidentally, shortly before this terrible kidnapping incident, a cryptocurrency industry executive was kidnapped in Canada and demanded ransom, and the CEO of United Healthcare was also assassinated. This series of events has left the cryptocurrency industry in a state of anxiety. Informed security industry sources told Wired magazine that, in order to protect themselves, wealthy cryptocurrency industry professionals have been seeking the services of bodyguards, leading to a significant increase in demand for such services.

“Like any other human emotion, fear is a powerful motivator… These headlines undoubtedly triggered a lot of concerns,” said Adam Healy. He was once a U.S. Marine and is now the CEO of Station 70, a cybersecurity company focused on the crypto field, often assisting industry contacts with security services. ‘Security demands have increased significantly.’

Not every kidnapping or extortion case is reported, so it is difficult to objectively assess the actual risks faced by the wealthy in the cryptocurrency industry. These headlines exacerbate people’s fear of kidnapping, which benefits private security firms as they have an incentive to exaggerate this threat.

In fact, due to the nature of encryption technology, those who control a large amount of cryptocurrency are more likely to be vulnerable to violent extortion than ordinary corporate executives: unlike ordinary currency, cryptocurrency is stored in digital wallets and protected only by keys. Cryptocurrency transactions are irreversible, so if a criminal can coerce someone to hand over the key, they can freely access the cryptocurrency in the wallet.

“This is one of the basic principles of cryptocurrency creation: the principle of self-custody. If you don’t have the private key, the cryptocurrency does not belong to you.” A cryptocurrency industry executive who once hired bodyguards to protect himself said that he requested anonymity for personal security reasons. “This is like hiding (your money) under the mattress.”

Over time, cryptocurrency institutions have taken measures to mitigate the risks of self-custody, such as storing cryptocurrencies in special wallets, where any transaction requires multi-signature approval. Sometimes, they may even split the wallet keys into several fragments and store them separately. However, even with such meticulous measures, their effectiveness in preventing kidnapping and extortion attempts is limited.

The security measures now are many layers more than five to ten years ago. But ultimately… when the gun is pointed at your head, (kidnappers) can take all your money.

Healy said that the misconception that cryptocurrency transactions are anonymous and untraceable, despite being proven wrong many years ago, exacerbates the dangers faced by cryptocurrency industry practitioners. “What bad actors see is a network of millions of dollars that cannot be traced. This description is not entirely accurate, but this is what they see. They think it’s an easy target.”

Security experts have stated that as the amount of funds flowing into the industry, public attention, and awareness of the risks associated with flaunting cryptocurrency wealth change, investors’ views on security have also significantly evolved over time.

John Moore, Managing Director of Westminster Security, a private security company based in London, said that in 2013, after the surge in the price of Bitcoin, early investors sought bodyguard protection to flaunt their newfound wealth. This new generation of cryptocurrency elite would fly to London for luxury shopping trips and demand stringent security measures. ‘They feel cool having a group of bodyguards around them and riding in luxury cars,’ Moore said. ‘It’s a bit over the top.’

Nowadays, crypto elites try as much as possible to avoid attracting attention and often choose plainclothes bodyguards. They are more aware that ‘wealth attracts unsavory characters.’ Moore said, ‘Those ‘Bitcoin kids’ (crypto nouveau riche) have matured. What they are pursuing now is low-key and covert protection.’

In the cryptocurrency industry, few people need full-time bodyguards. They mainly choose to hire bodyguards when participating in public events or going abroad.

Sources said that the actual situation of protecting executives in the cryptocurrency industry varies by case, but overall, it is more about logistical arrangements than physical protection. This includes communicating with venues planned for clients to visit, conducting advance site surveys, communicating with law enforcement agencies, and providing close protection when clients need to pass through crowds.

“In their circles, these people are like rock stars,” said Darrell M. Blocker. After ending his long career as a senior agent of the CIA, he founded the personal security company DMB Consulting. “People who focus on cryptocurrency know who the big shots are.”

The overall goal of the bodyguard is to never be forced to take action, but to eliminate any potential threats well in advance. Blocker said that in very few cases, if the client needs to go to a particularly dangerous area, it may be necessary to arrange armed escorts and armored vehicles, and even to bribe the gangs and crime groups that control the specific area.

“We communicate with the police, and we also communicate with the people the police want to put in jail. We must be able to talk to both sides.” Blocker said, “Kidnapping is a business, and businessmen are willing to negotiate… There is a way in theft.”

Sometimes, due to the close contact between bodyguards and clients during their work, their relationship almost becomes like family. In another scenario, clients are dissatisfied with carefully planned actions as they do not like losing their freedom of movement. Blocker said, ‘It’s never easy to entrust one’s life to others.’

However, after events such as the kidnapping of Balland, industry insiders in the cryptocurrency industry gradually realized that while it may be troublesome to have security personnel, it is necessary. Healy estimates that for every exposed cryptocurrency industry kidnapping case, there are an equal number of unreported cases, and he privately learned about some unreported kidnapping incidents. ‘This proves that people are really concerned… they hope these things don’t happen,’ Healy said, ‘the danger is real.’

A high-profile incident has highlighted the unique vulnerabilities associated with cryptocurrencies, which could have adverse effects and incentivize other potential extortionists. “These cases will indeed be sensationalized, but the risk is that others may imitate the crimes,” said Ryan Martin, Vice President of Operations at Crisis24 Private Strategic Group, which provides bodyguard and other security services.

The anonymous cryptocurrency industry executive interviewed by Wired magazine said that while investors are becoming more cautious about publicly disclosing their cryptocurrency wealth, cryptocurrency institutions are also storing cryptocurrencies in a wiser manner. However, threats are inevitable: ‘If you decide to manage your own finances (referring to holding cryptocurrencies), you have to be prepared for the potential risks.’