Extortionists Are Using Bitcoin To Steal Cash From Business Owners

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noticeofextortion-285x366Extortionists are going completely anonymous thanks to social media and bitcoin. Brian Krebs just posted on a number of pizzerias that received anonymous letters asking for one bitcoin in order to keep the owners from receiving bad ratings on Yelp, the Better Business Bureau and the like as well as to keep the extortionists from “SWATing” – calling the police to report violent crimes or drugs on the premises.

After the deadline the price goes up to three bitcoin – a few thousand dollars – and then the badgering begins. This also includes denial of service attacks and vandalism.

Thanks to BTC, however, the extortion is vilely effective. The pizza places have until mid-August to comply, the time lag added to presumably allow the non-techie owners to open a Coinbase account.

Sandra Alhilo, general manager of Pizza Pirates in Pomona, Calif., received the extortion demand on June 16.

“At first, I was laughing because I thought it had to be a joke,” Alhilo said in a phone interview. “It was funny until I went and posted it on our Facebook page, and then people put it on Reddit and the Internet got me all paranoid.”

Krebs notes that these extortion attempts are coming up against a major adversary – the US Postal Service. Because the letters came through the mail, the federal government can and probably will use its resources to see exactly where these letters came from and what identifying characteristics can be discovered from the postmark and physical pages.

The fraudsters could also be caught when they try to cash out their bitcoin, a major consideration when trying this sort of scam.

Recent extortions have included Domino’s in France which refused to pay $40,000 to prevent the release of 650,000 pieces of private customer information. Considering these pizzerias have very little in the way of value – except their cash – this is more of a low yield, short-term scam. Here’s hoping these guys get caught and that the community helps bring them down. After all, extortion is a bad way to introduce bitcoin to small businesses.