Crypto community fear the worst after kidnappings

After watching frightening images of a prominent French crypto boss' daughter being attacked on a Paris street during a botched kidnapping, crypto executive Alexandre Aimonino draws reassurance from changes he has made to his daily routine.

To stay safe, the 23-year-old co-founder of a crypto compliance software company avoids public transport, skips industry get-togethers, and varies his drive home.

"Working in the ecosystem feels like having a target on your back," Aimonino told Reuters.

French crypto bosses have reacted with fear and anger after a series of violent kidnappings.

While some have stepped up security and are considering bodyguards, others are calling for a tougher crackdown on crime, plus deregulation to keep the crypto paper trail more anonymous.

In the latest incident on Tuesday, a masked gang tried to abduct the daughter of Pierre Noizat, the CEO of the French crypto firm Paymium. The incident, in broad daylight, went viral after it was filmed by onlookers.

It was at least the third such attack in recent months.

In January, the co-founder of French crypto company Ledger and his wife were kidnapped in central France, while in May, the father of a head of a crypto company was snatched in Paris. Although all were rescued, both of the men lost a finger.

A ransom in cryptocurrency was paid during the kidnapping of the Ledger co-founder, but quickly recouped by French investigators.

Details are murky about the gangs behind the attacks, though authorities have said 10 people were questioned after the Ledger attack and seven people were arrested following the first kidnapping in May, with two released for having no connection.

The Paris prosecutors' office said the organised crime unit of Paris police was investigating Wednesday's attack. The prosecutors did not respond to detailed questions from Reuters.

Though a small part of global financial markets, the rapid rise in the price of bitcoin and other cryptocurrencies in recent years has created a new group of wealthy investors.

Security experts interviewed by Reuters said that criminals could be tempted by investors posting evidence of new-found wealth online, as well as the perception that crypto is easier to launder than traditional cash.

"Crypto transactions are more likely to escape the level of scrutiny applied to traditional banking systems," said Michael Lyons, a lawyer specialising in anti-money laundering at Clifford Chance.

“Gruesome, brazen'

Cryptocurrency has long been demanded as ransom payments in hacks and cyberattacks, and regulators around the world are trying to crack down on crypto's use by criminals.

For some, the attacks are a symptom of France's growing violent crime problem.

"The heart of the matter is ... whether we know how to repress crime in this country," Noizat said on BFM TV on Friday.

Eric Larcheveque, a Ledger co-founder, said crime may be fuelling an exodus.

"How many entrepreneurs, how many talented individuals, are seriously considering leaving a country that no longer protects its people?" he wrote on X. "How many have already left, silently, out of weariness, fear, or resignation?"

French Interior Minister Bruno Retailleau met with French crypto players on Friday to calm their nerves and outline measures to protect them and their families.

Noizat's company, Paymium, suggested deregulation could provide founders with more security.

In a statement posted on X on Wednesday, Paymium criticized European regulations like the international "travel rule" - already in place in traditional financial institutions - which requires data to be collected about the source and recipient of crypto transfers.

Some crypto bosses are taking measures into their own hands.

Thomas Rossi, who runs Wagram, a bodyguard company in Paris, said he had many new requests after Tuesday's attack. His firm also provides security for visiting U.S. crypto executives.

Sofiane Aboubeker, CEO of French security company ARECIA, also said he had seen an increase in requests for close protection.

Ben Davis, who runs an insurance brokerage in the UK for crypto clients, said that while France was facing a particular wave of attacks, there had also previously been incidents in the U.S., elsewhere in Europe, and around Asia.

"Two years ago, kidnapping and ransom wasn’t really a big problem, no one really wanted to talk about it, and now 100% of our clients are talking about it," he said.

Davis, who is also a crypto investor, said he has taken steps to increase his own security, but did not want to give details: "These attacks are again becoming more gruesome, more brazen, and are increasing in likelihood and severity."