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Bitcoin thieves threaten real violence for virtual currencies

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The currency they were after was virtual, but the guns they carried were anything but.

In the beach resort of Phuket, Thailand, last month, the assailants pushed their victim, a young Russian man, into his apartment and kept him there, blindfolded, until he logged onto his computer and transferred about $100,000 worth of Bitcoin to an online wallet they controlled.

A few weeks before that, the head of a Bitcoin exchange in Ukraine was taken hostage and only released after the company paid a ransom of $1 million in Bitcoin.

In New York City, a man was held captive by a friend until he transferred over $1.8 million worth of Ether, a virtual currency second in value only to Bitcoin.

The rich have always feared robbery and extortion. Now, big holders of Bitcoin and its brethren have become alluring marks for criminals, especially since the prices of virtual currencies entered the stratosphere last year.

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Virtual currencies can be easily transferred to an anonymous address set up by a criminal. While banks can stop or reverse large electronic transactions made under duress, there is no Bitcoin bank to halt or take back a transfer, making the chances of a successful armed holdup frighteningly enticing.

Thieves have taken advantage of this system in a startling number of recent cases, from Russia, Ukraine and Turkey to Canada, the United States and Britain.

“This is now becoming more pervasive and touching more law enforcement divisions that deal with organized crime and violent crime on a local level,” said Jonathan Levin, the founder of Chainalysis, which has worked with several law enforcement agencies on virtual currency crimes.

Mr. Levin’s company specializes in tracking criminal transactions on the blockchain, the computerized ledger where every Bitcoin transaction is publicly recorded.

Chainalysis has helped police attempt to track down criminals in several recent cases, including some that have not been made public, according to Mr. Levin.

But even when a transaction can be tracked, the design of Bitcoin means that criminals do not have to associate their identity with their Bitcoin address — as is necessary with most traditional bank accounts. That has stymied police in several cases.

“For this, the advantage of Bitcoin is that it’s hard to verify,” said Chanut Hongsitthichaikul, an investigator with the Chalong Police Station, which investigated the case in Phuket. “We asked the victim how to track it since they know Bitcoin better than us. We asked them how to check the receiver. They said there is no way. It is hard to do.”

The Thai police tracked the victim’s laptop, which was also stolen, to Kuala Lumpur. That’s where the trail went cold.

While the recent crime wave has brought a new level of violence, virtual currency holders have been targets for several years. Criminals have been staging a long-running campaign to remotely hijack the cellphone numbers of prominent virtual currency holders in order to gain control of their digital wallets.

A few years ago, some of Bitcoin’s earliest proponents had SWAT teams called to their homes by people who demanded big Bitcoin payments to stop the harassment — a tactic called “SWATing” in some online communities.

There have also been many documented holdups around the world at in-person meetings where people were looking to convert cash into virtual currency, including one last year in Palm Beach, Fla., where the thief made off with $28,000 before being arrested.

But criminals have grown much more brazen as the price of Bitcoin has spiked.

The most audacious attack hit Exmo, the virtual currency exchange in Ukraine. The chief executive of the exchange, Pavel Lerner, was abducted the day after Christmas and freed a few days later after the company made a ransom payment of Bitcoin worth around $1 million.

A spokeswoman for Exmo said the money came from Mr. Lerner’s personal funds. Mr. Lerner was on leave from the company but would return.

A month earlier, a Turkish businessman was forced to hand over the passwords to his virtual currency wallets — containing nearly $3 million worth of Bitcoin — after having his car stopped by an armed gang in Istanbul that appeared to know about his Bitcoin holdings, according to local news reports.

Many big virtual currency holders privately say that they will no longer travel to Russia, Turkey or other countries where they assume that attacks may be easier to pull off because of organized crime.

But armed attackers have also hit a Canadian Bitcoin exchange in Ottawa, the Ether investor in New York City and a prominent virtual currency trader living near Oxford, England.

In a number of cases, the assailants have been caught — and forced to return money — because of video footage. In other cases, the criminals are still at large.

The unsolved crimes have sown fear among the ranks of the so-called crypto rich, which have grown considerably over the past year.

At a conference for about 170 leaders in the virtual currency industry this month, there was a panel discussion about how to deal with the threat of robbery, extortion and kidnappings in which the criminals seek Bitcoin or other virtual currencies.

Organizers of the conference, known as the Satoshi Roundtable and held near Cancun, Mexico, brought in a security force and instituted significant privacy measures for guests to protect them from criminals while they were in attendance.

During the group discussion at the conference, attendees talked about having a “duress wallet” at home that can be handed over to throw an assailant off the trail of a bigger fortune, as well as several other security measures that can be used to deal with the threat.

Most of the crypto rich are loath to speak publicly about the risk of physical attacks, for fear of making themselves targets.

But Jameson Lopp, a longtime Bitcoin engineer and virtual currency holder, said the community should be proactive in confronting the threat, to let criminals know that people are taking steps to protect themselves.

Last summer, someone called a SWAT team to Mr. Lopp’s house to harass him. Since then, Mr. Lopp has installed closed-circuit cameras around his property and posted photos on Twitter of the automatic weapon he has at home.

In a more technical defensive measure, Mr. Lopp has long kept his virtual currency in so-called multisignature wallets created by the company he works for, BitGo. These wallets require multiple people to sign off on a transaction before the money can move.

Mr. Lopp will go even further later this year when he, his girlfriend and his dog move to a new home. He plans to “go dark” — not providing the address to anyone and using a post office box for deliveries. But he said even that will not fully banish his concerns.

“If you are rich and you own real estate, or stocks or a sports team, somebody can’t mug you and take your sports team away,” he said. “Having liquid crypto assets makes you much more attractive for that type of criminal attack.”

Mr. Levin said programmers are working to develop methods of signing virtual currency transactions that can quietly alert the authorities that a transaction is being made under duress — something like the hidden button under the bank teller’s desk.

But he said the most obvious way to thwart attackers is with wallets that require multiple signatures, and with less public discussion about owning virtual currencies.

Mr. Lopp said it is important to publicize the many ways in which virtual currency holders can fend off assailants so that criminals reconsider the likelihood of a successful attack.

“We’re in the very early days of this becoming a problem,” Mr. Lopp said. “The attackers are still trying to figure out what the risk-reward really is.”

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China may test digital yuan with foreign visitors at Beijing Olympics

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BOAO, China — China is trying to make it possible for foreign athletes and visitors to use its digital currency during the Beijing Winter Olympics in 2022, a top central bank official said on Sunday.

It could be the first test for China’s digital currency with international users.

Li Bo, deputy governor of the People’s Bank of China (PBOC), also said the aim of the digital yuan or e-CNY (electronic Chinese yuan) is not to replace the U.S. dollar’s dominance on the international stage.

For the upcoming Beijing Winter Olympics, we were trying to make e-CNY available not only to domestic users, but also to international athletes and like visitors.

Li Bo

deputy governor, People’s Bank of China

The PBOC began researching the digital yuan in 2014 and has recently launched a number of pilot projects around China which allow residents of cities including Shenzhen and Beijing to test the currency with retailers. The e-CNY is aimed at replacing cash and coins in circulation and boosting cashless payments in China. It is not a cryptocurrency and not designed like bitcoin.

“For the upcoming Beijing Winter Olympics, we were trying to make e-CNY available not only to domestic users, but also to international athletes and like visitors,” Li said during a panel moderated by CNBC at the Boao Forum for Asia on the island of Hainan.

Li said the Chinese central bank will include “more scenarios and more cities” to test the digital yuan.

The deputy governor said there is no timeline yet for a nationwide rollout of the digital yuan but that the PBOC needs to increase the scope of its pilot projects and “strengthen” the technology infrastructure underpinning the digital currency.

Challenge to U.S. dollar?

Various commentators have suggested that China’s digital yuan could be a way to internationalize the renminbi and also challenge the U.S. dollar as the world’s reserve currency. Much of international commerce happens in U.S. dollars.

But Li reiterated that the PBOC is focused on the domestic use of the digital currency.

“For the internationalization of renminbi, we have said many times that it’s a natural process and our goal is not to replace (the) U.S. dollar or any other international currency,” Li said. “I think our goal is to allow the market to choose and to facilitate international trade and investment.”

A digital Chinese currency red packet is seen on a mobile phone in an arranged photograph as Chengdu city starts to distribute 200,000 E-CNY ‘red packets’ worth 40 million yuan on February 24, 2021 in Yichang, Hubei Province of China.

VCG | Visual China Group | Getty Images

However, the PBOC is working with other central banks — including those from Thailand, the United Arab Emirates and Hong Kong — to explore the use of the digital yuan in cross-border trade.

“Our focus again is that we want to establish a very solid domestic e-CNY first, and build up a healthy ecosystem.  At the same time, working with our international partners. Hopefully, in the long term, we have a cross border solution as well,” Li said.

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Singapore’s DBS bank on financing coal projects, avoiding ‘greenwashing’

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SINGAPORE — Singapore’s largest bank DBS Group Holdings said it’s not practical to cut off clients with coal exposure in the short term.

DBS on Friday announced that it aims to eliminate thermal coal exposure by 2039.

To get there, DBS will cease taking on new clients that derive more than 25% of their revenue from thermal coal with immediate effect. And from January 2026, the bank will stop financing clients with more than 50% of their revenue from thermal coal — except for their non-thermal coal or renewable energy activities.

Explaining the 50% threshold, DBS Chief Executive Piyush Gupta cited how it’s “impossible” to expect energy majors BP, Exxon Mobil and Shell to reduce their oil business significantly in the next five years.

Piyush Gupta, chief executive officer of DBS Group Holdings.

Bryan van der Beek | Bloomberg | Getty Images

“Similarly the whole bunch of conglomerates that we deal with, for whom coal is one part of their business but they’re increasingly trying to do other stuff, they’re trying to build a renewable business, they’re trying to get into other forms of activities,” he told CNBC’s “Squawk Box Asia” on Friday.

“For us to say that we won’t deal with any client if your coal is more than 50% of business becomes very hard and that’s just the practical reality. You do want to help them do the other things, you do want to help them build a wind plant, you do want help them continue and diversify their business, you want to help them in the transition,” said Gupta, who’s a member of CNBC’s ESG Council.

Avoiding ‘greenwashing’

Banks globally have come under pressure by shareholders and lobbyists to stop financing coal and play a larger role in promoting sustainability practices among their clients.

Gupta acknowledged that it’s “very hard” to make sure that businesses are not “greenwashing” — a term used to describe giving a misleading impression of green credentials.

Part of the problem is not having a clear framework to measure how companies are living up to their ESG — environmental, sustainability and governance — targets, said the CEO.

ESG is a set of criteria used to measure a company’s performance in areas ranging from carbon emissions to contributions to society and staff diversity.

“The reality is we rely on our clients in many cases to disclose what they’re doing. I can’t physically go to every mine they have around the world, to every plant they have around the world,” he said, adding that DBS also uses third-party consultants to audit and check on its clients.

As attention on ESG practices grows, disclosure standards will likely improve, said Gupta.

“So while there will be greenwashing at the margin, I think the degree of scrutiny is increasing and that will allow people to get more and more comfortable that what is being done is indeed the right stuff,” he said.

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European Super League announces 12 football clubs, 6 from England

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Trent Alexander-Arnold of Liverpool controls the ball during the UEFA Champions League Quarter Final Second Leg match between Liverpool FC and Real Madrid at Anfield on April 14, 2021 in Liverpool, England.

Shaun Botterill | Getty Images Sport | Getty Images

Twelve of Europe’s leading football clubs have agreed to establish a Super League, despite widespread criticism of the plans.

A statement from the new competition said: “AC Milan, Arsenal, Atlético Madrid, Chelsea, Barcelona, Inter Milan, Juventus, Liverpool, Manchester City, Manchester United, Real Madrid and Tottenham Hotspur have all joined as founding clubs.

“It is anticipated that a further three clubs will join ahead of the inaugural season, which is intended to commence as soon as practicable.”

Florentino Pérez, president of Real Madrid and the first chairman of the Super League, said: “We will help football at every level and take it to its rightful place in the world. Football is the only global sport in the world with more than four billion fans and our responsibility as big clubs is to respond to their desires.”

The project is being launched to rival UEFA’s Champions League format which currently dominates European football and it comes as UEFA was due to sign off on plans for an expanded and restructured Champions League on Monday.

The new Super League has been criticized by politicians, such as Prime Minister Boris Johnson and Labour Party leader Sir Keir Starmer, as well as former players such as Gary Neville.

Mr Johnson said the new league would “strike at the heart of the domestic game, and will concern fans across the country.”

He added: “The clubs involved must answer to their fans and the wider footballing community before taking any further steps.”

Sir Keir said the plans had ignored the fans, adding: “Football in empty stadiums hasn’t been the same over the last year. I can’t wait to get back to games. But this proposal risks shutting the door on fans for good, reducing them to mere spectators and consumers.

“The clubs involved in this proposal should rethink immediately. And if they don’t, they should face the consequences of their actions. Because football without fans is nothing.”

Former Manchester United defender Gary Neville told Sky Sports: “I’m not against the modernisation of football competitions, we have the Premier League, the Champions League, but I think to bring forward proposals in the midst of COVID and the economic crisis for all clubs is an absolute scandal.

“United and the rest of the ‘Big Six’ that have signed up to it against the rest of the Premier League should be ashamed of themselves.”

Neville added: “They should deduct six points off all six teams that have signed up to it. Deduct points off them all. To do it during a season? It’s a joke.”

UEFA, the FA, and the Premier League are among others to have expressed opposition, saying in a joint statement that they “remain united in our efforts to stop this cynical project”, adding: “We thank those clubs in other countries, especially the French and German clubs, who have refused to sign up to this.

“This persistent self-interest of a few has been going on for too long. Enough is enough.”

The English FA said: “We would not provide permission to any competition that would be damaging to English football, and will take any legal and/or regulatory action necessary to protect the broader interests of the game.”

The Super League competition will see 20 participating clubs – 15 founding clubs and a further five teams able to qualify annually based on their achievements during the previous season.

It will begin in August with clubs participating in two groups of 10, playing home and away fixtures, some during the week, with the top three in each group qualifying for the quarter-finals.

Teams finishing fourth and fifth will compete in a two-legged play-off for the remaining quarter-final spots before a knockout format is used to reach the final at the end of May, which will be staged as a single fixture at a neutral venue.

Club players will be able to continue competing in their national leagues and, as soon as possible after the men’s competition begins, a women’s league will also be launched.

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