GuShiio.com Security demand from the encryption industry has increased significantly.
Written by: Joel Khalili, Wired Magazine reporter
Compiled by: Luffy, Foresight News
A well-dressed security guard is holding a intercom
In the early morning of January 21, David Balland his wife were coerced into different vehicles by several gunmen outside their home in the town of Merlot in the luxurious Loire Valley region of France. A prosecutor said the kidnappers ‘target was Balland, one of the co-founders of cryptocurrency wallet company Ledger, and that the kidnappers’ purpose was to demand ransom.
The kidnappers conveyed their request to another Ledger co-founder, ric Larchchev que, although law enforcement has not disclosed the details. In order 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.
Paris prosecutor Laure Beccuau described the incidents at a press conference on January 23 and in subsequent reports. Beccuau claimed that authorities had arrested ten people suspected of being involved in the kidnapping. She said the men face charges of crimes such as “torture, cruelty and extortion” and if convicted, they face a maximum sentence of life imprisonment.
Ledger declined to comment, citing the ongoing investigation and the need to protect Balland’s privacy. Ledger CEO Pascal Gauthier posted on X (formerly Twitter):”We are deeply pleased that Balland and his wife have been released.”
Coincidentally, the horrific kidnapping occurred shortly after a cryptocurrency industry executive was kidnapped in Canada for ransom and the CEO of United Healthcare was assassinated. This series of incidents has caused panic in the cryptocurrency industry. Security industry sources familiar with the situation told Wired magazine that in order to protect themselves, wealthy people in the cryptocurrency industry have turned to bodyguard services, and the demand for bodyguard services has increased significantly.
“Like other human emotions, fear is a powerful driving force and these headlines have undoubtedly caused a lot of concern,” Adam Healy said. A former U.S. Marine and now CEO of Station 70, a cybersecurity company focusing on encryption, he often helps industry contacts obtain security services. “Security demand has increased significantly.”
Not every kidnapping or extortion case is reported, making it difficult to objectively assess the actual risks faced by wealthy people in the cryptocurrency industry. These headlines fuel fears of kidnapping, which benefits private security companies, which have the incentive to exaggerate the threat.
In fact, due to the nature of encryption technology, people who control large amounts of cryptocurrencies are more likely to suffer violent extortion than ordinary corporate executives: unlike ordinary currencies, cryptocurrencies are stored in digital wallets and protected only by keys. Cryptocurrency transactions are irreversible, and if bad guys can coerce someone to hand over the key, they can access the cryptocurrency in their wallets without restrictions.
“This is one of the basic principles for the creation of cryptocurrencies: the principle of self-preservation. Without the private key in hand, the cryptocurrency does not belong to you.” A cryptocurrency industry executive who has hired bodyguards to protect himself said he requested anonymity for personal security reasons. “That’s the equivalent of hiding (your money) in a mattress.”
Over time, cryptocurrency institutions have taken measures to reduce the risks posed by self-custody, such as storing cryptocurrency in special wallets, and any transaction requires multiple signatures to be carried out. Sometimes, they even break the wallet key into several fragments and store it in different places. But even such meticulous measures will only have a limited effect in deterring kidnapping and extortion attempts.
“There are many more layers of security today than they were five to ten years ago.” “But at the end of the day, when a gun is pointed to your head,(the kidnapper) can take all your money,” the cryptocurrency executive said.
Security experts said that as the amount of money flowing into the industry changes, public attention increases, and perceptions of the risks involved in flaunting cryptocurrency wealth change, cryptocurrency investors ‘views on security have also changed significantly over time.
John Moore, managing director of London-based private security firm Westminster Security, said that after Bitcoin prices soared in 2013, early investors sought bodyguard protection to show off their newfound wealth. This generation of cryptocurrency upstarts will fly to London on luxury shopping trips and demand tight security measures. “They think it looks cool in a luxury car with a group of bodyguards around them,” Moore said.”It’s a little too much.”
Nowadays, the cryptocurrency elite try to stay out of the spotlight as much as possible, often choosing plainclothes bodyguards, knowing better that “wealth attracts bad people.” Moore said,”Those ‘Bitcoin boys'(the upstart of cryptocurrency) have matured. What they are now pursuing is low-key and covert protection.”
Few customers in the cryptocurrency industry need round-the-clock protection by bodyguards, and they only choose to hire bodyguards when attending public events or traveling abroad.
Sources said that the actual situation of protecting executives in the cryptocurrency industry varies from case to case, but overall, it involves more logistical arrangements than force protection. This includes communicating with where customers plan to visit, surveying locations in advance, communicating with law enforcement, and providing close protection when customers need to pass through crowds.
“In their circle, these people are like rock stars,” Darrell M. Blocker said. After ending a long career as a senior CIA agent, he founded personal security company DMB Consulting Services. “Anyone who cares about cryptocurrencies knows who those big shots are.”
The overall goal of the bodyguard is never to be forced to take action, but to eliminate any potential threat long in advance. In rare cases, Blocker said, if customers are traveling to particularly dangerous areas, they may need to arrange for armed escorts and bulletproof vehicles, and may even have to pay bribes to gangs and criminal groups that control specific areas.
“We communicate with the police and we also communicate with people the police want to put in prison. We must be able to talk to both sides.” Blocker said,”Kidnapping is a business, and businessmen are thieves who are willing to negotiate.”
Sometimes, due to the close contact between bodyguards and clients at work, the relationship between them becomes almost like family. In another case, customers are dissatisfied with carefully planned actions and do not like to lose their freedom to act. “It’s never easy to hand over your life to others,” Blocker said.
High-profile incidents highlight the unique vulnerabilities associated with cryptocurrencies, which could have adverse effects and inspire other potential racketeers. “These cases do get hyped up, but the risk is that someone may copy them.” Ryan Martin, vice president of operations at Crisis24 Private Strategic Group, said the group provides bodyguards and other security services.
The cryptocurrency industry executive who spoke anonymously to Wired magazine said that while investors have become more cautious about disclosing their cryptocurrency wealth and cryptocurrency institutions have become smarter about the way they store cryptocurrencies, threats are inevitable: “If you decide to take charge of your finances (meaning holding cryptocurrency), you have to be prepared for the risks you may face.”
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