‘Limited evidence’ that EU regulations facilitated criminals in cryptocurrency kidnappings.

      Earlier this month, the father of a wealthy cryptocurrency entrepreneur was kidnapped in Paris while walking his dog. The assailants, wearing balaclavas, forced him into a van and later amputated one of his fingers, sending a video of the act to his son along with a demand for millions of euros in ransom.

      This incident adds to a rising list of violent crimes in France associated with cryptocurrency wealth. Among the victims are a well-known entrepreneur and his wife who were taken hostage, a man covered in petrol, and a child who was nearly abducted.

      As anxiety grows within France’s crypto community, some industry leaders are criticizing the EU’s significant digital asset regulations for exposing holders to heightened danger. Their worries focus on the transparency mandates, which could facilitate the tracking of crypto owners. However, other members of the industry believe that blaming the EU regulations is too convenient.

      Stanislas Barthélemi, president of the French crypto advocacy group ADAN, informed the New York Times this week that the regulations may unintentionally endanger holders. He stated that by creating a traceable digital footprint, criminals could potentially scrutinize blockchain transactions to identify affluent targets.

      Alexandre Stachchenko, strategy director at the French crypto exchange Paymium, shared similar concerns. He noted that the industry “desires to remain discreet and anonymous,” but EU legislation “indicates it’s criminal.”

      However, others in the sector contest the assertion that EU regulations have contributed to the increase in attacks.

      Marit Rødevand, CEO and co-founder of Norwegian anti-money laundering firm Strise, remarked that there is “little evidence” linking the EU’s regulations to crypto kidnappings. “Although advocates of cryptocurrency may suggest that the uptick in physical assaults on those in the field results from regulations, this view is overly simplistic and diverts attention from genuine security concerns,” she stated.

      Rødevand noted that information about potential targets could equally be obtained through hacks, social media exposure, or publicity, as many crypto entrepreneurs are notable influencers.

      Christopher Whitehouse, a crypto specialist and solicitor at the London-based law firm RPC, also found no correlation. He asserted that individuals holding substantial amounts of cryptocurrency are “obvious targets.” “The recent rise in crypto-related kidnappings in France is concerning but not unexpected,” Whitehouse told TNW.

      He pointed out that cryptocurrencies possess several attributes that make them appealing for ransom. They can be transferred immediately, are hard to trace if moved by skilled criminals, and lack the protections of conventional bank accounts. In contrast, traditional cash can be tracked using serial numbers.

      Exploiting human vulnerability

      The recent violence in France, while severe, is not unprecedented. According to information gathered by crypto security advocate Jameson Lopp, over 200 physical attacks against Bitcoin and cryptocurrency holders have been reported since 2014, some resulting in fatalities.

      Matt Green, head of blockchain technology disputes at London law firm Lawrence Stephens, believes that the violence ultimately stems from criminals exploiting the most vulnerable aspect of the crypto environment: people. “The only barrier preventing criminals from gaining access is human error or coercion; hence kidnapping aims to undermine the integrity of that human-led security,” he told TNW.

      To protect themselves, some wealthy crypto holders are enhancing their personal security measures, such as hiring bodyguards.

      Green also recommends an additional layer of protection: multisignature wallets, which require multiple users to carry out certain actions, like making transfers.

      Just as some stores post signs indicating that no cash is kept on-site, crypto holders might benefit from making it known that a single individual cannot access the funds, Green suggested.