28-Year-Old New Yorker Robbed At Gunpoint — For Bitcoin

Bitcoin, like any other object, is subject to thievery. Such is the case with an unidentified New York resident who was led to his car and robbed of his $1,100 in bitcoin, according to CNBC. The victim, who posted a Craigslist ad to sell cryptocurrency, met an individual interested in his bitcoin near the Brooklyn neighborhood of Crown Heights. The suspect led the seller to an undisclosed vehicle where two men brandished weapons and instructed the seller to transfer all bitcoin to them. Once the transfer was complete, the seller’s mobile phone was stolen and the thieves sped off.

This case closely mirrors what happened to Dave Katz in February. A man in Queens allegedly robbed Katz of $8,500 in bitcoin and $3,500 in cash so he could place a Superbowl bet. Also, a New York firefighter was held up and stabbed during a purported bitcoin deal, although news has surfaced denying that bitcoin was involved. The cases, like so many other bitcoin robberies, remains under investigation, and no arrests have been made in connection to either crime. Katz and similar industry experts call the bitcoin crime wave “stagecoach robberies” due to their similarity in how they’re conducted like Old West robberies.

Because bitcoin is virtually untraceable, criminals with technical acuity have capitalized on sales ads to bilk millions since the bitcoin boom began. This digital currency is mined, requiring highly technical servers and knowledge of the block chain process. Because servers require hefty investments, criminals often prey on those who either mine them regularly or have substantial holdings, befriending them on forums like BitCoinTalk and similar discussion sites. Once criminals have earned the seller’s trust and set up meetings, they can hold them at gunpoint and forcibly transfer mounds of bitcoin into any virtual wallet of their choosing; since there’s no regulation on bitcoin trading to date, no paper trail is left and transactions are irreversible. At the time of this article’s publication, one bitcoin equals $224.98.

With bitcoin’s value plummeting after January’s $5 million hack, sellers are looking to unload their holdings — hence the constant flux of Craigslist postings. Regulation of bitcoin may only be years away, which would slow down criminal activity and deter websites such as Silk Road from existing. Until then, it’s suggested one deals with individuals after due diligence is complete and the meeting takes place somewhere secure and public, like the lobby of a police station, where the transaction can be recorded by security cameras.

[Photo by George Frey / Getty Images News]