This week we talk about kidnappings, ransoms, and bitcoin.
We also discuss crypto wealth, robberies, and memecoins.
Recommended Book: The Status Game by Will Storr
Transcript
In 2008, a white paper published by someone writing under the pen name Satoshi Nakamoto proposed a method for making a decentralized asset class called a cryptocurrency that led to the creation of bitcoin, which was implemented and began trading in 2009.
While there were other variations on this theme, and attempts to create something like a cryptocurrency previously, bitcoin is generally considered to be the first modern incarnation of this asset class, and its approach—using a peer-to-peer network to keep track of who owns what tokens on a publicly distributed ledger called a blockchain—led to the development of many copycats, and many next-generation cryptoassets based on similar principles, or principles that have been iterated in all sorts of directions, based on the preferences and beliefs of those assets’ founders.
In its early days, bitcoin didn’t make much of a splash and was considered to be kind of an anomaly, mostly interesting to a very small number of people who speculated about alternative currencies and how they might be developed and implemented in the real world, but as of mid-May 2025, the global market cap for all cryptocurrencies is $3.39 trillion, bitcoin accounting for more than $2 trillion of that total.
That said, there are tens of thousands of cryptocurrencies available, these days, though the majority of them have been formally discontinued or simply allowed to go fallow, becoming functionally inactive.
That’s partly the consequence of a surge in interest during the height of the COVID-19 pandemic, the price of bitcoin popping from just over $5,000 at the start of the pandemic to around $68,000 in late-2021.
Bitcoin and most of the other crypto-assets that sprung up during that tumultuous period then collapsed when the US Federal Reserve hiked interest rates, intending to temper inflation, which had the knock-on effect of reining in risky bets on things like seed-level startups and alternative assets classes, like crypto—bitcoin dropped to less than $17,000 in 2023, partly as a result of that move—but as inflation levels cooled and investors started to look for assets that might pay out big time again, there was another wave of crypto-asset launches, especially of the ‘meme coin’ variety, which basically means a crypto token that’s launched either as a joke, or to try to make some money off something that’s trending—the most famous meme coin is probably Dogecoin, which was originally released in 2013 as a joke, but then boomed in popularity and price during the pandemic.
Through it all, and well before most people knew what bitcoin or cryptocurrencies were, Coinbase has served as a central pillar of the crypto-asset ecosystem.
The company was founded in 2012 by a former Airbnb engineer as a crypto exchange: a place where you can swap crypto assets for other crypto assets, but importantly, where you can also sell those assets for real world money, or buy them for real world money.
And that’s what I want to talk about today, and more specifically a recent hack of Coinbase, and the potential implications of that hack.
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In mid-May of 2025, Coinbase reported, in a legally required Securities and Exchange Commission filing, that their company was hacked, and that the hack may end up costing Coinbase between $180 and $400 million, all told.
According to that filing, Coinbase received an email from the hacker on May 11, saying that they’d obtained a bunch of information about Coinbase customers and their accounts, alongside other Coinbase documentation related to their account management systems and customer service practices. The hacker demanded $20 million from the company, which the company refused to pay.
Coinbase officials have been keen to note that passwords and private keys were not compromised in the hack, so the hackers couldn’t just log into someone’s account and empty their crypto wallets or the real-deal money they might be keeping there, but they did access names, addresses, phone numbers, and email addresses, alongside the last four digits of some users’ social security numbers, their government ID images, like drivers licenses and passports, and their account balances.
All of which isn’t as bad as passwords and private keys being stolen, but it’s not good, either. The hackers, or people working with them, have reportedly been launching phishing attacks against some of the higher net-worth individuals whose information was stolen, those attacks—which usually involve tricking victims into divulging other information, like passwords—made a million times easier because the folks doing the attacks had that stolen information.
What’s more, and this isn’t necessarily obvious from reading the pieces published about this hack, but it’s important context surrounding all of this, people who have a lot of money in crypto-assets are increasingly likely to be targeted for other sorts of crimes, compared to people with a lot of wealth in conventional assets, like money, homes, and stocks.
Case in point, in early May of this year, a trio of Florida teens kidnapped a man at gunpoint in Las Vegas, drove him to a remote desert area about an hour away, and then stole about $4 million in crypto and other digital assets, like NFTs.
They apparently waited for him at his apartment complex and when he pulled up, they threatened him, and said they had his dad, and would kill him if he didn’t get in their car, and then they got his account passwords and other information from him, once he was away from any possible help.
In Canada, back in early November of 2024, the CEO of a crypto company based in Toronto was kidnapped during rushhour, forced into the kidnappers’ vehicle and forced to pay a million dollars in ransom before he was released.
According to a security firm that specializes in protecting wealthy people with crypto-assets, that CEO’s kidnapping was the 171st instance of criminals using physical violence, including kidnapping, but also other types of robbery, to steal crypto assets; they also said there tend to be more such cases when the price of these assets is high.
Well, the price of a bitcoin is high right now, more than $103,000 per coin, as of the day I’m recording this, and France and other Western European nations are seeing a spate of kidnappings of high net-worth crypto-holders, some of which have resulted in mutilation, as was the case with a 60-year-old man who was kidnapped in broad daylight, at 10:30am in Paris—four men in ski-masks pushed him into the back of a delivery van, and his kidnappers demanded his crypto-millionaire son pay a ransom; they cut off the older man’s finger during the ordeal.
The kidnappers demanded something like 5-7 million euros, which wasn’t paid, and they were eventually captured by police. But law enforcement is seeing a lot of this sort of thing all over the world right now, people who made fortunes in crypto being kidnapped, and in some cases their friends and family, or partners, also being kidnapped, or kidnapped instead. Whatever the specifics, the person with the crypto-wealth is then hit up for a ransom.
Often, the people being targeted are known to be wealthy because their wealth, their gains in this particular asset market, is publicized.
The big concern amongst many people in the crypto-world right now, then, is that although the Coinbase hack didn’t result in lost passwords or keys, the information that was stolen, including the balance of users’ accounts, could make these users targets, giving anyone with access to this stolen data a list of people they might steal from, and information about where to find them, how to contact them, and how much they can probably hit them up for.
On top of that, they can see who has had large balances in the past, how much cash they sold their holdings for, and who maybe previously had large holdings on Coinbase, but then transferred those assets to a private wallet—so even if they don’t have large Coinbase balances, they possibly have large balances hidden on a harddrive somewhere.
Crypto wealth is generally considered to be easier to steal, and to get away with said theft, because of its very nature; it’s largely disconnected from traditional banking systems and many traditional banking regulations, and it’s often simpler to launder crypto assets than real money, converting bitcoin into stable coins into other coins before then converting those assets into real money, for instance.
So while Coinbase seems to be doing what they can to make their users whole, including paying back users whose information was lost in the breach, that information then used to phish them, successfully—so if you were conned out of money because the hackers got this information and then tricked you—Coinbase will pay you back what you lost.
But it’s not really possible to undo other, non-immediate damage, like the new level of threat some of these hacking victims maybe face, as the global economy gets weird, job security is iffy for many people in many industries, at best, and there’s this list of people who seem to have plenty of money, that money held in more-stealable-than-usual assets, alongside what amounts to a map to where they can be found, and all sorts of information that paints an incomplete, but potentially leveragable, portrait of their lives.
Show Notes
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001679788/000167978825000094/coin-20250514.htm
https://www.cnbc.com/2025/05/15/coinbase-says-hackers-bribed-staff-to-steal-customer-data-and-are-demanding-20-million-ransom.html
https://techcrunch.com/2025/05/15/coinbase-says-customers-personal-information-stolen-in-data-breach/
https://www.nytimes.com/2025/04/24/magazine/crybercrime-crypto-minecraft.html?unlocked_article_code=1.Hk8.UV7K.VEEqHFsUu24g&smid=url-share
https://www.yahoo.com/news/florida-teens-kidnap-las-vegas-200918594.html
https://www.cbc.ca/news/canada/toronto/kidnapping-toronto-businessman-cryptocurrency-1.7376679
https://www.theguardian.com/world/2025/may/04/french-police-investigate-spate-of-cryptocurrency-millionaire-kidnappings
https://www.advisor.ca/investments/market-insights/the-reasons-behind-bitcoins-surge/
https://www.statista.com/statistics/863917/number-crypto-coins-tokens/
https://www.forbes.com/digital-assets/crypto-prices/?sh=c86585d24785
https://en.wikipedia.org/wiki/Coinbase
https://en.wikipedia.org/wiki/Cryptocurrency
https://en.wikipedia.org/wiki/Bitcoin
https://www.sciencedirect.com/science/article/abs/pii/S0378437122005696
https://en.wikipedia.org/wiki/Meme_coin
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