Flashing your wealth on social media or being a high profile executive is dangerous, crypto-ties or not.
Worse: Even if you give me all your passwords, I may want to keep beating until I'm really sure that you're not holding anything back.
Your "hot wallet" should be like cash, no more than you are prepared to lose/surrender at once.
And your cold wallet could be the stock market or real estate or private equity
Then you're much safer and just as wealthy
Later log into the accounts, flip the toggle to stolen/lost and mark unauthorized purchases if there are any. Then sleep peacefully knowing new credit cards are in the mail and you are only out the cost of the physical wallet holding the cards that were stolen.
So, you want to delegate your ability to spend your money to other people.
Why not just go to a bank? It can do that for you, plus pay you interest.
A custodial service is a bank that operates on a different network and is not FDIC insured (which only covers $250k). It could be insured privately. The interest on an FDIC deposit account is well below true inflation of fiat currencies.
The risk would be about the same as for any ransom scheme.
Indeed. A friend of mine manages a retail bank branch for a major US bank. She gets a few cases a week where someone appears to be a scam victim or is being coerced in some way. They want to make an unusually big cash withdrawal for their account history, or do an unusual money transfer, or something involving gift cards. She's seen all the standard scams by now, and is experienced in explaining what's going on to the victims. Often she can talk them down, or help them. Sometimes even get previously scammed money back.
A surprisingly large part of retail finance work is dealing with fraud and fixing problems. The routine transactions have been automated for years, after all. Crypto land lacks this.
Here's a bank's guide to current scams.[1]
[1] https://www.firstcitizens.com/personal/insights/security/top...
Another option is to keep your cold storage in a safe deposit box or private vault, so you have to physically go someplace where there are other people. An advantage of the multisig is that the criminals can verify the situation, possibly before they show up at your house.
Having your wealth held in a form that can be instantly, irreversibly transferred in a way that can be done anonymously by skilled individuals is an added risk.
Some of the same features that people celebrate about crypto make it uniquely advantageous to people looking to execute these attacks.
Yes, we know that in theory attackers could go after some random high profile person and force them to go through bank transfers and then go through all of the additional steps of washing that money through international banks in a way that hopefully cleans their trail sufficiently.
But anyone planning an attack like that would be drawn to a target that already has their money held in a digitally transferable format that is infinitely easier to launder using the modern array of cryptocurrency tools.
Most businesses turn their cash over to a bank at the end of the day, so any ransom cash that the kidnappers spend or deposit in a bank is tracked very quickly.
Of course crypto can be tracked as well, but financial institutions are required to follow authority instructions and freeze and reverse assets that may belong to kidnappers. In most crypto there is no authority to reverse the assets.
You can have a system where ids of all wallets containing stolen crypto are kept in a database and nobody does accepts any payments from these addresses. However many crypto advocates are strongly opposed to such a system.
So in conclusion, kidnapping of law abiding citizens for ordinary money has not been happening in the us for a while because the fbi had made it clear that it does not pay. But crypto is a whole other business.
It is hopeful that for all current cases the perpetrators seem to have been caught. But i am afraid there may be more attempts before criminals are convinced it does not pay.
Given the finite quantity that many cryptocurrencies can create, I'm curious if another 'attack' will become popular at one point: destruction.
If only x units / tokens and be generated, if you can destroy or otherwise make inaccessible some quantity, then the ones you already own should become more valuable. So perhaps in the future we'll find the kidnappers change from demanding a transfer to demanding destruction, so the perpetrator's own holdings grow in value.
Ask Kim Kardashian about that. I don't think she had anything to do with crypto.
Being an “Influencer,” these days, means that you get the “famous” part of “rich and famous,” without the “rich” part (quite often).
Being famous (and noticed/admired by others) is important to insecure young folks. Not so much, older people.
Many of the world’s richest people, are completely under the radar. You’d never know it.
In many countries, rich folks (and their families) have to travel around in armored cars, surrounded by goons. Even middle-class people need to surround their homes with broken-glass-topped walls (I used to live in some of those places).
Kidnapping and attacking rich folks is a cottage industry, in many places. The US has been spared (until now).