Original author: Joel Khalili, Wired Magazine reporter
Original translation: Luffy, Foresight News
A well-dressed security guard is talking on a walkie-talkie
David Balland and his wife were forced into separate vehicles by armed kidnappers outside their home in the town of Merlot in France’s luxurious Loire Valley in the early hours of January 21. A prosecutor said the kidnappers were targeting Balland, one of the co-founders of the cryptocurrency wallet company Ledger, and were seeking a ransom.
The kidnappers conveyed their demands to Ledgers other co-founder, Éric Larchevêque, though law enforcement has not yet disclosed the details. In order to force the other party to pay the full ransom, they cut off one of Ballands fingers. French authorities have sent more than 200 police officers to investigate the kidnapping.
Police rescued Balland from a home in the nearby town of Châteauroux on January 22. They later found his wife, bound but otherwise healthy, in the back of a dilapidated van.
Paris prosecutor Laure Beccuau recounted the events at a press conference on January 23 and in subsequent reports. Beccuau announced that authorities had arrested 10 people suspected of involvement in the kidnapping. She said the men face charges of torture, cruelty and extortion and face a maximum penalty of life imprisonment if convicted.
Ledger declined to comment, citing the ongoing investigation and the need to protect Balland’s privacy. Ledger CEO Pascal Gauthier posted on X (original Twitter): “We are deeply relieved that Balland and his wife have been released.”
Coincidentally, this horrific kidnapping incident happened shortly before a cryptocurrency industry executive was kidnapped for ransom in Canada and the CEO of United Healthcare was assassinated. This series of events has caused panic in the cryptocurrency industry. Informed security industry sources told Wired magazine that in order to protect themselves, wealthy cryptocurrency industry figures have turned to bodyguard services, and the demand for bodyguard services has increased significantly.
“Like any other human emotion, fear is a powerful motivator… These headlines have definitely caused a lot of concern,” said Adam Healy, a former U.S. Marine who is now CEO of Station 70, a cybersecurity company focused on encryption, and who often helps contacts in the industry get security services. “The demand for security has increased dramatically.”
Not every kidnapping or extortion case is reported, so it is difficult to objectively assess the actual risk faced by the wealthy in the cryptocurrency industry. These headlines fuel fears of kidnapping, which benefits private security companies, which have an incentive to exaggerate the threat.
In fact, people who control large amounts of cryptocurrency are more vulnerable to violent extortion than ordinary corporate executives because of the nature of encryption technology: Unlike ordinary currency, cryptocurrency is stored in digital wallets and is protected only by keys. Cryptocurrency transactions are irreversible, and if bad guys can coerce someone to hand over the key, they have unlimited access to the cryptocurrency in the wallet.
“This is one of the founding principles of cryptocurrency: the principle of self-custody. If you don’t have your private keys, your cryptocurrency doesn’t belong to you,” said one cryptocurrency industry executive who hired bodyguards to protect him, speaking on condition of anonymity for personal safety. “It’s like hiding (your money) in your mattress.”
Over time, cryptocurrency institutions have taken steps to reduce the risks of self-custody, such as storing cryptocurrencies in special wallets and requiring multiple signatures for any transaction. Sometimes, they even split wallet keys into several pieces and store them in different places. But even such elaborate measures can only have a limited effect in preventing kidnapping and extortion attempts.
“There are so many more layers of security now than there were five to 10 years ago,” the cryptocurrency executive said. “But at the end of the day … when a gun is pointed at your head, (the kidnappers) can take all your money.”
Healy said the dangers faced by those in the cryptocurrency industry are exacerbated by the misconception that cryptocurrency transactions are anonymous and untraceable, despite being disproven years ago. The bad guys see millions of dollars of untraceable money online. Thats not entirely accurate, but thats what they see. They see it as an easy target.
Security experts say cryptocurrency investors’ views on security have changed significantly over time, as the amount of money flowing into the industry changes, the level of public attention and the changing perception of the risks involved in showing off cryptocurrency wealth.
John Moore, managing director of Westminster Security, a London-based private security firm, said that after the price of Bitcoin soared in 2013, early investors sought bodyguard protection as a way to show off their new wealth. This generation of cryptocurrency nouveau riche would fly to London for luxury shopping trips and demand tight security measures. They thought it looked cool to be surrounded by a group of bodyguards and driving luxury cars, Moore said. It was a bit too much.
Today, the cryptocurrency elite try to stay out of the spotlight as much as possible, often choosing plainclothes bodyguards, knowing that wealth attracts bad elements. Moore said, The Bitcoin kids (cryptocurrency upstarts) have matured. They are now looking for low-key, hidden protection.
Few clients in the cryptocurrency industry need round-the-clock protection from bodyguards, and they mainly choose to hire bodyguards when attending public events or traveling abroad.
The actual circumstances of protecting cryptocurrency industry executives vary from case to case, but generally involve more logistics than physical protection, the sources said. This includes communicating with the venue the client plans to visit, scouting the location in advance, communicating with law enforcement, and providing close protection when the client needs to walk through crowds.
“These guys are like rock stars in their own circles,” said Darrell M. Blocker, who founded the personal security firm DMB Consulting Services after a long career as a senior CIA operative. “Anyone who follows cryptocurrency knows who the big guys are.”
The overall goal of a bodyguard is to never be forced into action, but to eliminate any potential threats long in advance. In rare cases, if a client is traveling to a particularly dangerous area, it may be necessary to arrange for an armed escort and bulletproof vehicles, or even bribes to gangs and criminal groups that control a particular area, Blocker said.
“We talk to the police, and we talk to the people the police want to put in jail. We have to be able to talk to both sides,” Blocker said. “Kidnapping is a business, and businessmen are willing to negotiate… Even thieves have their own code of conduct.”
Sometimes, the bond between bodyguards and clients becomes almost family-like because of the close proximity they work in. In other cases, clients are unhappy with the carefully orchestrated operation and don’t like losing their freedom of movement. “It’s never easy to put your life in someone else’s hands,” Blocker said.
However, after incidents such as Balland’s kidnapping, people in the cryptocurrency industry have gradually come to realize that having security personnel is troublesome but necessary. Healy estimates that for every reported kidnapping in the cryptocurrency industry, there are an equal number of cases that go unreported, and he said he has privately learned of some kidnappings that have never been made public. “It proves that people are really worried... They hope these things don’t happen,” Healy said. “The danger is real.”
High-profile incidents highlight the unique vulnerabilities associated with cryptocurrencies, which could have a negative impact and inspire other would-be extortionists. These cases do get hyped up, but the risk is that there could be copycats, said Ryan Martin, vice president of operations at Crisis 24 Private Strategic Group, which provides bodyguards and other security services.
The cryptocurrency industry executive who spoke to Wired magazine anonymously said that although investors have become more cautious about disclosing their cryptocurrency wealth and cryptocurrency institutions have become smarter about how they store cryptocurrency, the threat is inevitable: If you decide to hold your own finances (referring to holding cryptocurrency), you have to be prepared for the risks you may face.
