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Exmo Bitcoin exchange chief executive kidnapped in Kiev
- bby 9y agoBTC doing the most as a currency when their chiefs get kidnapped.
- deleted 9y ago[deleted]
- logfromblammo 9y agoMathematical basis for Bitcoin still compromised by "rubber hose" cryptanalysis. Let this be a reminder that physical security is a necessary precursor to computer security. And I also hope that Exmo's succession plan executor takes the precaution of staying up late tonight to move all their reserves to new wallets.
- ImSkeptical 9y agoThat will be a brutal task, knowing that doing it ensures your colleague will get tortured and be unable to stop the torture by giving up the bitcoins. Still, probably for the best.
- monkmartinez 9y agoOr was it an inside job? Bitcoin is such bullshit garbage.
- ringaroundthetx 9y agoYeah hopefully assailants will also be educated in the futility of their actions If the whole idea of a kneecap-breaking plot fails because transferring the funds requires multiple signers then they arent going to break kneecaps
- ImSkeptical 9y agoAgreed, it would still be a tough task to complete.
- DennisP 9y agoExactly. For large amounts, keep the hardware wallet in a safe deposit box, not in your house.
- Klathmon 9y agoOr you can use the strengths of cryptocurrency and split a key between a safe deposit box, your home, and yourself, and require 2 of 3 of them to get the original key.
- frikk 9y agoThat's a neat idea. Do you mind expanding on it?
- solotronics 9y agoit's called 2 of 3 multisig and it's a standardized part of most cryotocurrency. it requires X of Y separate key signings to complete a transaction from an address
- MichaelGG 9y agoShamir's Secret Sharing allows this even without dealing with multisig wallets.
- Klathmon 9y agoThis is what I had in mind. And it can scale to any "n of m" you want, without any if the downsides if multisig wallets (namely larger transactions, and more complex Bitcoin wallets required) 2 of 2, 3 of 5, 7 of 10, etc...
- DennisP 9y agoI like the idea but I wish there were a widely-trusted implementation with public security reviews, maybe built into wallet software.
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- deleted 9y ago[deleted]
- derefr 9y agoThe mathematical basis for multisig wallets is explicitly resistant to rubber-hose cryptanalysis, if the keys are distributed sensibly (e.g. with one going off to a counter party in a different political regime who can’t be compelled by the same state-actors as you to share keys.)
- cm2187 9y agoThe best way to not get your car stoken is to leave the engine in a warehouse in Germany, the chassis in a car park in Brazil and the rest in your garage in California. That's super secure but how do you use it every day?
- AgentME 9y agoAn exchange doesn't have to have all of their assets ready to use at a moment's notice. They could have 95% of their assets locked up in an inconvenient but safe method. If their hot wallet starts running low, then they begin the process to top it up with their hard-to-use multisig protected funds.
- decker 9y agoGood thing nobody can tell when the hot wallet starts to run low, otherwise they might know the exact moment when the keys need to come together.
- tehlike 9y agoFor bitcoin, they can actually tell. For things like monero, not really.
- AgentME 9y agoThe keys don't have to come together. Each keyholder can separately sign the transaction from wherever they are on the planet. The transaction to add funds into the hot wallet could have been pre-arranged. One of the keys could be controlled by a law office on the other side of the planet with contractual obligations to only sign the hot-wallet-refill transaction with a certain amount when the hot wallet falls below a certain amount and when the exchange requests it. The cold-wallet that they're funding from could itself be funded by a timelocked transaction to guarantee that the cold-wallet isn't emptied out too fast, and an entirely different set of law offices that the exchange doesn't regularly contact control the keys that allow the cold-wallet to be emptied out faster. If the different types of on-chain controls like timelocked transactions aren't enough, then some of the keys could be in tamper-proof hardware-security-modules that further restrict how the keys can be used.
- DangsBane 9y agoBlackwater be like "pro bono recovery for 3% plz"
- monkmartinez 9y agoA few more stories like this and governments (militaries) will be "activated"... both physical and digital, if they haven't been already.
- solotronics 9y agowhat do you mean?
- mschuster91 9y agoQuite likely that governments will force exchange operators to get appropriate security. Hell if I had the keys (or were in a position to be used as "leverage" for them in a kidnapping) to a Bitcoin exchange, I would surround me with a bunch of ex-military guards.
- mooneater 9y agoNow (depending on the country) how do you trust the ex-military guards, if what they are guarding is worth far more than their salaries?
- larrykwg 9y agoWhile that sound smart and plausible, I would assume that there is some solution to that problem, otherwise how would private security work at all?
- ceejayoz 9y agoA security guard selling the Mona Lisa has to figure out how to get rid of it. Bitcoin's quite a bit easier in that regard.
- michaelt 9y agoBe in a country with the rule of law. Structure things so if they betray you, they have a very high chance of getting detected and needing to go on the run - e.g. access control records, CCTV and whatnot. Then hire guards who would have to sacrifice a lot if they went on the run permanently. e.g. guards with partners, school-age children, extended family nearby, friends, and community ties like membership of voluntary organisations, churches or clubs.
- provost 9y agoWow, this is awful. I've met coin exchange directors, and one of them mentioned to me that this was a topic of concern within their management. Specifically that their families might be targeted too. I don't know anything about Mr. Lerner, but hopefully the police will find him safe, soon.
- zzzcpan 9y agoIt is possible that it was done by a corrupt secret service (SBU), that recently started raiding people involved with crypto currencies in Ukraine and stealing their coins. The ForkLog guy was not afraid to speak up [1] [1] https://cointelegraph.com/news/ukraine-security-service-allegedly-raid-forklog-confiscate-tech-and-funds https://cointelegraph.com/news/ukraine-security-service-alle...
- qaq 9y agoThere are huge conglomerates in Ukraine operating in Crypto, gambling, porn, ransomware etc. Could be just some rivals attacking competitors (and paying of SBU to do the bidding is fairly realistic option)
- aviv 9y agoI raised this concern in a comment last week. We are going to see more instances of this. Remember how in the movies they break into a bank manager's house and hold the family captive while someone goes with the manager to open the bank vault? Same thing is inevitably going to happen IRL. I always say exchangers are Bitcoins weakest link. All it takes is one compromised employee at Coinbase or another large exchanger (intentional or some kidnapping scenario) for the price to come crashing due to the damage they can be forced to do. Never ever keep your coins on an exchange wallet. Never.
- busterarm 9y agoHow many of these kidnappings are going to be faked to provide cover for a theft? It's exactly the thing I would do.
- smokeyj 9y agoMulti signature wallets are easy enough to use. You’re going to need a lot more rubber hoses.
- cm2187 9y agoThere is only so much a bunch of criminals can take out of a bank's local branch. But for a bitcoin exchange, they could in theory take the whole thing, including client's funds if they share the exchange's public wallet. If you think about it, it can be a $100m+ robbery.
- jameslk 9y agoSo it appears criminals are getting wiser and a new wave of home and personal robberies may emerge. Will this push crypto owners to entrust their currency with more secure institutions, leading to these "decentralized" currencies to be once again under control and manipulated by banks and governments?
- tptacek 9y agoYes? I mean, that's happening even without lurid kidnappings.
- jondubois 9y agoProbably the criminals were upset about their withdrawals taking so long ;p It took me like 2 months to cash out the first time. Seriously, I don't think this will scare off anyone, especially not exchanges. They make so much money right now they can just hire bodyguards.
- jameslk 9y agoI could imagine the current exchanges becoming banks, in the disruptive sense. What's stopping them from creating interest-earning savings accounts and loaning out on a fractional reserve basis? Seems like we'll be back where we were a century ago, bank runs and all.
- QAPereo 9y agoThe governments of the world?
- pjc50 9y ago"Tether" is effectively a fractional-reserve "currency" in use by bitfinex.
- thomasdub 9y agoThere isn't much evidence that Tether Limited is indeed keeping a reserve of USD for each Tether printed [0]. They are minting hundreds of millions of Tethers and there are a lot of skeptics out there who don't believe that they have billions of USD in a bank. [0] https://seekingalpha.com/article/4133884-bitcoin-additional-suspicious-developments https://seekingalpha.com/article/4133884-bitcoin-additional-...
- m3kw9 9y agoThe Winkofloss brothers stores their codes right to prevent these type of kidnappings. They distributed the keys across states and bank vaults.
- jordanbaucke 9y agowinklevoss? Distributing keys doesn't prevent you from having a few "digits" (no pun intended) removed. "Oh you can't get them? Call the other key-holders. Better hope they like your fingers as much as you do."
- jordanbaucke 9y agoIn "Casino" Robert De Niro's character puts $2M in jewels in a safe-deposit box that even he doesn't have the key for (he naively gives the key to his wife- but that's another part of the plot) He narrates that the jewels are "in case he got in trouble". Ostensibly so he could pay off kidnappers.
- chrissnell 9y agoI have the "poor man's" version of De Niro's safe-deposit box, a Rolex Submariner. Readily convertible into US$3-5K cash (at least) in pretty much any large city in the world. It's always on my wrist. If I needed the money desperately and couldn't access my accounts, I have my beloved watch.
- DonHopkins 9y agoI'd rather not know what time it is than wear a Rolex. I would be self-conscious about people thinking I was that vain and materialistic, assuming it's fake, and that I was a poseur. Get a money belt if your point isn't just to show off and you're not asking to get rolled.
- jorde 9y agoUnless you go for the yellow gold or two-tone (gold/steel) models, 95% of the people won't no that you're wearing a Rolex. Regular Submariner or Datejust is pretty nondescript and doesn't scream Rolex at all. Only other watch nerds will notice.
- readhn 9y agohe ded.
- 55555 9y agoUnfortunately, one of the 'killer apps' for crypto is extortion. It's going to change the world and not for the better. The hard part of extortion has always been getting paid. It's always involved exposure ("meet me there with a bag of money") or been subject to limitations (wire transfer clawbacks, cash withdrawal limits, etc), until now. Right now anyone in the world can fill an insulin syringe with cyanide solution, walk into supermarkets (too big to properly secure, and there's too many supermarkets to prevent it), and inject it into random plastic coke bottles. People will stop drinking coke, and then Coca-cola will be willing to pay hundreds of millions of dollars to make it stop. Ten years ago, the extortionist would then have to meet somewhere to collect a bag full of money, and that's where the risk comes in. But now they can simply send coca-cola a bitcoin address and get paid anonymously risk-free. You can design extremely profitable low-risk crimes. The question then becomes, if more people were given the ability to steal risk-free, would they? Anyone who has spent time in the crypto ecosystem has already learned the answer. They will. This is why nearly every exchange gets 'hacked' and so many darknet vendors pull exit scams. It turns out a lot of the reason most people are good all the time has more to do with fear of getting caught than virtue. The world is about to become a very scary place. Be the change that you wish to see. Money won't make you happy.
- wskinner 9y agoUpvoted for your last two sentences. If this is the destiny of humanity, so be it. Either we will get past it, or we won't. That was always the case, bitcoin or not. The fundamental issue is human nature. Technology merely distills and clarifies.
- ace_of_spades 9y agoThis is not really such an obvious consequence as you make it out to be. Technology can channel different aspects of human nature more or less intensively. Bitcoin for example is a design which puts forward more of the „bad“ sides... through its design it channels greed at the expense of sustainability. Interestingly it only works if people participate and accept it, so we actually have a strong lever that we can work against it. Just don’t participate. So to sum up... I think it’s mor appropriate to say the fundamental issue is how we design around human nature to create a world worth living...
- lafar6502 9y agoOr all bitcoin gone together with the boss. Nobody knows if kidnappers weren’t just a coverup
- TeeWEE 9y agoThe weak spot of Cryptos is in the exchanges. Getting your money in or out of crypto is a reall hassle, and a risky undertaking. I still had some money at Exmo, moved them to Ether to send them to Kraken (and in my own wallet eventually). However the ethereum transaction is still in "Verifying status". Normally I always keep my cryptos in cold storages, but you cant want you want to exchange them for cash. I also tried to get my Euros out of Exmo, but verification is already taking more than a week. My trust is gone in them. And thats the whole point. Exchanges are still based on trust, thats not what decentralized cryptos are about. It only works if everybody works on the blockchain only.
- gst 9y agoFor crypto-crypto exchanges you can use trustless atomic swaps. For crypto-fiat just use a reputable exchange that operates in your local jurisdiction.
- NiklasMort 9y agoupdate: https://www.theguardian.com/uk-news/2017/dec/29/ukraine-kidnappers-release-hostage-after-1m-bitcoin-ransom-paid https://www.theguardian.com/uk-news/2017/dec/29/ukraine-kidn...