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Extortion in the crypto wallet world: Binance executives robbed

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Executives of a VIP client of crypto exchange Binance were tricked and kidnapped in Montenegro during an alleged “business trip” in which they had to compulsorily comply with the thugs’ demands by emptying their crypto wallets.

In this “kidnapping hack,” the stolen funds amounted to $12.5 million.

Changpeng Zhao, CEO of Binance, and his team tracked the on-chain movement of the loot and managed to block up to 94% of the sum.

$11.8 million was freed in USDT and safely returned to a Tron wallet.

This story highlights the ferocity with which various criminals try everything to illegally obtain cryptocurrencies, even going as far as kidnapping and extortion.

Below are all the details.

Executives of a Binance client scammed for $12.5 million: kidnapped in Montenegro and forced to empty their crypto wallets

We are talking about a hack attack different from the usual methods by which cybercriminals manage to gain virtual access to the victim’s private keys through phishing, malware and whatnot.

This time the violence was physically enacted by going so far as to kidnap some executives of a VIP client of the Binance exchange and forcing them to transfer all their $12.5 million in crypto from their wallets to those of the crooks.

The executives in question were in Montenegro under the guise of an alleged “business trip” by which they were duped and ended up in a very unpleasant situation.

Making this story known is the CEO of the Binance exchange platform itself, who told his community about the affair with a post on X.

We do not know who the victims are and on whose behalf they work, nor what they were in Montenegro for.

All that has been leaked is that 94% of the funds stolen in the particular “hack” were recovered thanks to the support of an intelligence team that combed through all the on-chain traces left by the kidnappers.

Tether in particular played a central role here, having frozen 11.8 million stolen USDT, making it impossible for criminals to take advantage of the cryptos.

The frozen stablecoins were transferred to a secure wallet via a Tron network transfer.

Executives from a client were lured on a ‘business trip’ to Montenegro, where they were abducted and forced to empty their wallets. Total loss ~$12.5m.

We investigated the on chain activities and reached out to our partners earlier today to have the wallet frozen, as all of the…

— CZ Binance (@cz_binance) November 10, 2023

This story highlights the increasingly novel ways in which various criminals around the world are trying to steal cryptocurrencies, either through hacks or physical violence.

After CZ reported the news story, Binance’s customer support reminded the X community of what are the standard procedures the exchange must follow when reporting abuses through the platform’s accounts:

“Depending on the information you provide, Binance may grant a temporary courtesy freeze of any allegedly stolen assets… To keep stolen assets frozen, you must provide a police report within 7 days after contacting Binance Support. Binance may extend the freeze period for you if you need more time to obtain a police report (on a case-by-case basis).”

Binance and Tether censure: cryptos start to look like fiat currencies

Below CZ’s post telling the story of this “real hack” that took place in Montenegro against a Binance customer, one user in particular stood out with a rather polemical comment that opened a very interesting debate.

This is the profile “Crypto Eagles,” a marketing and fundraising agency also participating in an NFT project, which in a very provocative way asked CZ if in what way crypto is better than fiat currencies given that the former can be “freezed.”

I really condemn this loss and happy coz most of the money is safe but I have a question @cz_binance
In fiat banks, everyone say that those guys can freeze money at any time without any reason
How crypto is better if someone can still freeze our personal wallet??

Simple…

— Crypto Eagles (@CryptoProject6) November 10, 2023

Crypto Eagles’ question subtends a philosophy that in the past, in the early days of Bitcoin‘s birth, was shared by almost all people approaching this world.

Bitcoin, in fact, and cryptocurrencies more generally, were born with the intention of offering a trustless alternative to fiat currencies, with which users would be able to exchange money freely without fear of censorship by a central entity.

Over time, however, more and more institutions and intermediaries have sprung up in the industry, compulsorily leading to situations where the libertarian component is diminished in favor of convenient services, such as the support of an exchange.

Crypto Eagles questions whether it makes sense for Tether and Binance, even in the case of hack or abuse, to have the power to block a USDT balance and return the cryptos in question to the original owner.

In fact, even if the action was taken in good faith, it represents an episode of outright monetary censorship.

Here Bitcoin maxis would immediately say that BTC is not censorable and that those who followed in Satoshi Nakamoto’s footsteps do not now face this dilemma, but things are more complex than all that.

Providing us with a very representative explanation of reality is CZ himself, who commenting below his post said:

“the central point is that the choice is yours.”

It’s a balance, and there is no perfect balance point.

If you use XMR, then there isn’t much anyone can do (or to help you with), as far as I know. Bitcoin can be traced, but not frozen, until you send it to a CEX.

— CZ Binance (@cz_binance) November 10, 2023

According to him, everything is relative and depends on the choice that is made by a wallet owner.

If one decides to trade in Monero, one obviously enjoys the greatest possible privacy and freedom (with all the associated risks such as extortion) while if one holds USDT one is subject to possible censorship.

Those who hold BTC, on the other hand, are in a middle ground in that they are not freezable ( unless sent to a CEX), but it is possible to track their movements with the help of a public blockchain.

Crypto assets are getting closer, at least in an ideal way, to the logic behind the fiat world.

In any case, everyone is free to go beyond these constraints and choose a noncustodial wallet and anonymous crypto to enjoy absolute freedom.

It all depends essentially on the purpose for which we hold crypto and how we obtained it.

For a hacker it is unthinkable to hold crypto on a CEX, while for an honest user who has nothing to hide there is nothing wrong with having their liquidity in USDT.

The choice is yours.

 

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