Paris kidnap attempt highlights need for crypto data security

Over the last few weeks, there has been an uptick in the number of kidnappings linked to the crypto community in the French capital, Paris. The latest one was the attempted kidnapping of relatives of Paymium co-founder Pierre Noizat on Tuesday.

The kidnapping situation, which was worsened by the attempt on Tuesday, has seen the French interior minister Bruno Rataileau announce a meeting with crypto professionals to discuss a way forward.

According to reports, most of these kidnappings happen because the criminals are looking forward to receiving ransom for those captured. However, the Director of Strategy at French crypto exchange Paymium, Alexandre Stachtenko, has taken a dig at how information related to crypto transfers under EU rules must be collected, calling it a “ticking time bomb.”

Paris kidnaps calls for crypto data security

According to Stachtenko, the current method is risky and one leak could put people in harm’s way. “If there is a leak of one of these databases from which I can find out who has money and where they live, then the next day it is on the dark web, and the day after there is someone outside your home,” he said.

The executive implied that crypto users are not safe because it only takes a platform breach for their details to be in the hands of bad actors.

Data theft is something that has been happening in the crypto market over the years, with the latest one related to popular crypto exchange Coinbase. The exchange mentioned that the criminals had bribed and duped their way into stealing digital assets from its users.

The exchange then added that the criminals asked for a bribe to keep the crime from coming out. However, instead of paying, Coinbase informed regulators about the crime and has made plans to spend between $180 million and $400 million to reimburse affected users.

After the attempted kidnapping, Paymium also released its statement urging authorities to ensure the protection of companies inside the sector. It also highlighted the disturbing trend of activities like these happening across different locations since the beginning of the year. The platform, which was founded in 2011, also cited “the highly dangerous aspects of certain financial regulations, either recently adopted or in the making”.

“With the unprecedented organisation of massive and sometimes disproportionate collection of personal data, public authorities contribute to putting the physical safety of millions of cryptocurrency holders in France, and more widely in Europe, at risk,” the platform added.

The comment was talking about rules that came into effect at the end of 2024, which extended the Travel Rule that was already in place for traditional finance transfers to include digital assets.

European AML regulations to restrict privacy coins and wallets

According to Stachtenko, one aspect of the Travel Rule he finds disturbing is the disclosure of the address of a user’s crypto wallet, which contains details of their accounts and transactions. He added that sensitive data like that is sometimes stored or exchanged insecurely, putting the holder in harm’s way. However, Sarah Compani, a lawyer specializing in digital assets, has mentioned that these regulatory changes are adopted to curb illicit acts in the crypto industry.

Meanwhile, the new anti-money laundering law in Europe, which will come into effect in 2027, will restrict the use of wallets and digital assets that allow its holder to be anonymous. The development is coming after France announced the same law, which it aims to use to fight narcotrafficking, targeting anonymous devices like crypto mixers used to obscure the origin of funds.

However, cybersecurity analyst Renaud Lifchitz has mentioned that there are many “legitimate interests” in having such tools.

He added that these tools are sometimes beneficial to many interested legitimate parties, such as journalists or activists opposed to an authoritarian regime that controls the traditional banking system. Meanwhile, the recent kidnappings can be explained by a “somewhat nouveau riche” and “ill-prepared” cryptocurrency sector. Since 2014, software developer Jameson Lopp said, he has recorded at least 219 physical attacks targeting crypto users.

KEY Difference Wire helps crypto brands break through and dominate headlines fast