He was asked to hand over US$100 million ($128 million) worth of crypto. The alleged captors were led by John Woeltz, known as the crypto king of Kentucky. The methods were by no means cryptic.
Whips and electric shocks were used. At one point, the helpless victim was threatened with a chainsaw. The kidnappers are also accused of pouring tequila on the alleged victim and lighting him. He begged for his life.
The police rescued him nearly two weeks after his disappearance. The kidnappers were later captured and charged. They have pleaded not guilty.
The Italian had to hand over his passwords to his crypto wallets. The crypto world has promised to decentralise finance. Instead, it has centralised risks. The lives of the crypto-rich are at stake.
See also: Ether funds draw record US$1 bil as corporate hoards expand
The Soho kidnapping case wasn’t unique. It was the most cinematic. In Hong Kong, traders have been beaten and held hostage during in-person USDT deals. In London, crypto influencers now hire private security. In Lagos, Bitcoin ransom cases are more common than cash claims.
Many of these crimes are driven by wallets without walls. Crypto’s weakness is that one is holding your money in a 12-word phrase. This vital piece of information can be beaten out of you in a basement.
Crypto exchanges like Coinbase may be the solution to this crime wave. The assets held in exchange wallets, like multi-sig controls and geofencing, can protect the customer.
See also: China tells brokers to stop touting stablecoins to cool frenzy
DBS compels a customer to make a series of steps to enact a large transfer.
Some exchanges even offer “panic mode”. This is a feature that freezes assets if a user sends a distress signal or unusual activity is detected. Exchanges have KYC protocols that help trace illicit flows. Suspicious transfers enacted through torture can be detected.
Coinbase and Binance have helped law enforcement recover US$3 billion this year alone. Cold wallets like the one that the Soho victim held cannot scream for help.
The exchanges can solve crypto’s trust deficit. Coinbase has insurance for wallet balances. Others have two-factor identity approvals through biometrics.
Like crypto kidnapping, bank robbery was common until the 1970s. In 1970, there were four bank robberies per day on average in the US. Today, there are fewer than nine in a year.
Bank robberies are not common in this city. The last bank robbery in Singapore was in 2016. A Canadian robbed the Standard Chartered branch in Holland Village. He escaped with $30,000 before the law caught up with him.
Bank robberies have become obsolete. They hardly carry cash. In the digital age, branches are like airport lounges. They provide a setting for customers to meet the bank.
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Singapore has an opportunity to cement its status as a crypto hub. The city has emerged as the Switzerland of crypto. It has better hawker food and stronger compliance than the landlocked European country.
Singapore may be about to host its first crypto exchange IPO. The valuation metrics of crypto exchanges have skyrocketed in the last two years. In 2023, valuations were muted after the FTX debacle. Crypto exchange valuations have risen from 7 times EV/Sales to 11 times EV/Sales in the last two years.
Who are IPO candidates? Crypto.com is a major global platform headquartered in Singapore. Its banners are prominent during the F1. This is fitting due to its rapid growth. The company has 100 million users, which is 10 times the level in 2021.
Independent Reserve is a prospect. It was formed in Australia in 2013. The crypto exchange expanded to Singapore in 2020 and became the first licensed exchange serving both retail and institutional investors.
OKX is another wildly popular exchange in Singapore. It has simplified crypto trading and expanded to asset management.
A crypto exchange IPO may be a blow to kidnappers. Investors will have more than one reason to rejoice.
Nirgunan Tiruchelvam is head of consumer and internet at Aletheia Capital and author of Investing in the Covid Era
