A bitcoiner’s guide to organized crime
Bitcoin is mainstream and organized crime has taken notice.
Recently, we learned about an organized crime ring that operated in the United States and carried out multiple home invasions that specifically targeted bitcoin holders. This is the first such crime ring to be caught, but it’s by no means the only one employing strategies to relieve people of their bitcoin. What can we learn from the types of attacks that have been perpetrated? How can you protect yourself from becoming a target?
Know the enemy: An example of a crime ring
Beginning in September 2022, a group of robbers roamed the U.S. in search of crypto owners to attack and extort. Wired reported on this series of crimes in great detail in this feature.
The robbers hacked into email accounts, learned about victims’ holdings, and physically surveilled them to determine their routines before breaking into houses. Once the group made entry, they held victims hostage, tortured them, gave death threats, and used family members as leverage.
The goal? Coerce the victims into giving up hardware wallets, passwords, and private keys by any means necessary. If thieves could get access to keys and/or exchange accounts, they could drain a victim’s crypto wallets, and that happened in at least one case in this spree, netting the thieves a score of more than $150,000 in bitcoin and ether.
But crime doesn’t pay, at least not for long. Despite their ruthless tactics, the thieves had trouble replicating their schemes across multiple victims. Their ringleader was eventually caught and convicted in federal court in 2024.
Why you need to prepare against organized crime
The events described above are by no means an isolated incident. I’ve been logging physical attacks on crypto holders going back a decade, and these are just the crimes we know about. Many attack victims are reluctant to come forward for fear of further exposure.
Physical attacks are unfortunately on the rise all around the world. As bitcoin increases in value, it grabs the attention of criminals, especially tech-savvy ones. With organized crime rings entering the mix, it can be expected that attacks will become more cunning, sophisticated, and brutal.
Jameson Lopp
But one shouldn’t be daunted to the point of being complacent. You can take steps to drastically reduce your exposure and your chances of being targeted. First, you need to develop an understanding of how you can wind up on a criminal’s radar.
How criminals identify victims
Privacy is an important aspect of security. While it’s not a complete solution to securing one’s wealth, it’s a good strategy to include in your security toolkit. Strong security solutions consist of multiple separate layers of security controls; consider privacy as the outermost layer of your security. The general premise is that if criminals are less aware of you, they are less likely to target you. Here are some ways criminals can learn about your crypto holdings:
- Social media posts about crypto
- Discussing crypto in public places
- Meetups and conferences
- Complex data harvesting from known and unknown breaches
I bring these factors up not to scare you, but to simply point out ways a person can attract unnecessary attention. We can’t change the past, but we can prevent risk from compounding in the future. It is common for thieves to track victims for months, sometimes years, in preparation for the opportune time, so it’s best to take a long-term approach to your security.
As expected, criminals are exploring the ROI of physically targeting bitcoin holders. I'm seeing more organized gang activity in this sector. Stay frosty! pic.twitter.com/lcxqmuGU8f
— Jameson Lopp (@lopp) June 26, 2024
If you hold the key(s) to your bitcoin on your person, you become a single point of failure. This means if you have bitcoin on an exchange, mobile wallet, or single hardware device, you can be forced against your will to send it to an attacker’s address.
To anticipate how an attack could occur, it’s wise to put yourself in the mind of a thief, focusing on the most likely threats first. Here are some of the tactics criminals use to get within proximity of victims and exploit them:
- Seek out targets by offering to perform high-value OTC (face-to-face deals) and rob the victim when they show up.
- Mug passers-by in the middle of the night, force them to unlock their phone, and search for any crypto apps.
- Find targets on dating apps and drug them into submission so they unlock their phone and any other apps used to access bitcoin.
- Identify high-value targets via social media, social engineering, data leaks, etc and attack them with a home invasion.
Organized crime rings are highly effective at performing complex dragnet operations in which they acquire a large set of potential victims from the Dark Web and narrow that band with more information over time as they assess the risks and potential rewards of an attack. It is much more profitable for a robber to choose a victim who doesn’t pay any attention to their security at all, including their privacy. So, let’s discuss how to avoid being easy pickings.
Protect yourself: Don’t make yourself a target
Privacy and security are two sides of the same coin. While security mechanisms will hopefully stop an attacker from being able to achieve their goal, strong privacy will hopefully prevent an attacker from targeting you in the first place.
Today, as many as 17% of U.S. adults hold crypto, and that trend is even larger in other countries. Seek to “blend in with the crowd” and not stand out as a wealthy bitcoin adopter. I myself have been targeted due to being a public figure associated with bitcoin, and I took steps to prevent further occurrences. The security considerations for public figures are an entirely separate discussion and a tailor-made service Casa offers for our Private Clients.
For everyday bitcoiners, here are several other tips for lowering your profile:
I advise against wearing any branded clothing or displaying other items that would signal your interest in bitcoin, such as stickers on laptops.
Don’t conduct face-to-face trades with people you don’t trust highly. Only conduct trades in public spaces with surveillance and preferably some sort of physical security.
Don’t wander around alone at night or put yourself in dangerous situations like drug deals that invite mugging.
Avoid posting the exact time and place you will be at a given moment. Share vacation pictures after the fact, and avoid real-time location tracking in exercise apps, such as Strava.
Don’t use dating apps if you’re a foreigner in a high-risk country like Colombia. You should assume you have no anonymity due to the availability of tools like reverse image search.
Don’t flaunt wealth on social media.
Don’t steal people’s bitcoin — there is no honor among thieves. There have been multiple incidents in which the victims who were attacked were targeted because they had committed thefts such as via SIM swapping and were known to have amassed a lot of BTC.
Final thoughts
When adversaries are highly organized, you should be equally organized in your response. Minimizing your known association to crypto will reduce your exposure to organized crime.
On top of a thoughtful approach to privacy, consider adding more keys to your cold storage for more robust security. Casa vaults spread your protection across multiple devices and locations to eliminate single points of failure for your bitcoin and other assets.
With a distributed multi-key vault, you can enjoy peace of mind that your bitcoin is safe. Learn more here.
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Jameson Lopp