Big holders of bitcoin and its brethren have become alluring marks for criminals. Credit:Shutterstock The rich have always feared robbery and extortion. Now, big holders of bitcoin and its brethren have become alluring marks for criminals, especially since the prices of virtual currencies entered the stratosphere last year. Virtual currencies can be easily transferred to an anonymous address set up by a criminal. While banks can stop or reverse large electronic transactions made under duress, there is no bitcoin bank to halt or take back a transfer, making the chances of a successful armed hold-up frighteningly enticing. 'More pervasive' Thieves have taken advantage of this system in a startling number of recent cases, from Russia, Ukraine and Turkey to Canada, the United States and Britain.

"This is now becoming more pervasive and touching more law enforcement divisions that deal with organised crime and violent crime on a local level," said Jonathan Levin, founder of Chainalysis, which has worked with several law enforcement agencies on virtual currency crimes. Exmo CEO Pavel Lerner was abducted the day after Christmas and freed a few days later after the company made a ransom payment of bitcoin worth around $US1 million. Levin's company specialises in tracking criminal transactions on the blockchain, the computerised ledger where every bitcoin transaction is publicly recorded. Chainalysis has helped police attempt to track down criminals in several recent cases, including some that have not been made public, according to Levin. But even when a transaction can be tracked, the design of bitcoin means that criminals do not have to associate their identity with their bitcoin address - as is necessary with most traditional bank accounts. That has stymied police in several cases.

"For this, the advantage of bitcoin is that it's hard to verify," said Chanut Hongsitthichaikul, an investigator with the Chalong Police Station, which investigated the case in Phuket. If you are rich and you own real estate, or stocks or a sports team, somebody can't mug you and take your sports team away. Jameson Lopp, a long-time bitcoin engineer "We asked the victim how to track it since they know bitcoin better than us. We asked them how to check the receiver. They said there is no way. It is hard to do." Thai police tracked the victim's laptop, which was also stolen, to Kuala Lumpur. That's where the trail went cold. New level of violence

While the recent crime wave has brought a new level of violence, virtual currency holders have been targets for several years. Criminals have been staging a long-running campaign to remotely hijack the cellphone numbers of prominent virtual currency holders in order to gain control of their digital wallets. A few years ago, some of bitcoin's earliest proponents had SWAT teams called to their homes by people who demanded big bitcoin payments to stop the harassment - a tactic called "SWATing" in some online communities. There have also been many documented hold-ups around the world at in-person meetings where people were looking to convert cash into virtual currency, including one last year in Palm Beach, Florida, where the thief made off with $US28,000 before being arrested. But criminals have grown much more brazen as the price of bitcoin has spiked. Exmo attack

The most audacious attack hit Exmo, the virtual currency exchange in Ukraine. The chief executive of the exchange, Pavel Lerner, was abducted the day after Christmas and freed a few days later after the company made a ransom payment of bitcoin worth around $US1 million. A spokeswoman for Exmo said the money came from Lerner's personal funds. Lerner was on leave from the company but would return. A month earlier, a Turkish businessman was forced to hand over the passwords to his virtual currency wallets - containing nearly $US3 million of bitcoin - after having his car stopped by an armed gang in Istanbul that appeared to know about his bitcoin holdings, according to local news reports. Many big virtual currency holders privately say they will no longer travel to Russia, Turkey or other countries where they assume that attacks may be easier to pull off because of organised crime. But armed attackers have also hit a Canadian bitcoin exchange in Ottawa, the Ether investor in New York City and a prominent virtual currency trader living near Oxford, England.

In a number of cases, the assailants have been caught - and forced to return the money - because of video footage. But in other cases, the criminals are still at large. Duress wallet The unsolved crimes have sown fear among the ranks of the so-called crypto rich, which have grown considerably over the past year. At an exclusive conference for about 170 leaders in the virtual currency industry earlier this month, there was a panel discussion about how to deal with the threat of robbery, extortion and kidnappings in which the criminals seek bitcoin or other virtual currencies. Organisers of the conference, known as the Satoshi Roundtable and held near Cancun, Mexico, brought in a security force and instituted significant privacy measures for guests to protect them from criminals while they were in attendance.

During the group discussion at the conference, attendees talked about having a "duress wallet" at home that can be handed over to an assailant to throw them off the trail of a bigger fortune, as well as several other security measures that can be used to deal with the threat. Going 'dark' Most of the crypto rich are loath to speak publicly about the risk of physical attacks, for fear of making themselves targets. But Jameson Lopp, a long-time bitcoin engineer and virtual currency holder, said the community should be proactive in confronting the threat, to let criminals know that people are taking steps to protect themselves. Last summer, someone called a SWAT team to Lopp's house to harass him. Since then, Lopp has installed closed-circuit cameras around his property and posted photos on Twitter of the automatic weapon he has at home.

In a more technical defensive measure, Lopp has long kept his virtual currency holdings in so-called multisignature wallets created by the company he works for, BitGo. These wallets require multiple people to sign off on a transaction before the money can move. Lopp will go even further later this year when he, his girlfriend and his dog move to a new home. He plans to "go dark" - not providing the address to anyone and using a post office box for deliveries. But he said even that would not fully banish his concerns. Loading "If you are rich and you own real estate, or stocks or a sports team, somebody can't mug you and take your sports team away," he said. "Having liquid crypto assets makes you much more attractive for that type of criminal attack." The New York Times