extortion

Cryptocurrency has always made a ripe target for theft—and not just hacking, but the old-fashioned, up-close-and-personal kind, too. Given that it can be irreversibly transferred in seconds with little more than a password, it’s perhaps no surprise that thieves have occasionally sought to steal crypto in home-invasion burglaries and even kidnappings. But rarely do those thieves leave a trail of violence in their wake as disturbing as that of one recent, ruthless, and particularly prolific gang of crypto extortionists.

The United States Justice Department earlier this week announced the conviction of Remy Ra St. Felix, a 24-year-old Florida man who led a group of men behind a violent crime spree designed to compel victims to hand over access to their cryptocurrency savings. That announcement and the criminal complaint laying out charges against St. Felix focused largely on a single theft of cryptocurrency from an elderly North Carolina couple, whose home St. Felix and one of his accomplices broke into before physically assaulting the two victims—both in their seventies—and forcing them to transfer more than $150,000 in bitcoin and ether to the thieves’ crypto wallets.

In fact, that six-figure sum appears to have been the gang’s only confirmed haul from its physical crypto thefts—although the burglars and their associates made millions in total, mostly through more traditional crypto hacking as well as stealing other assets. A deeper look into court documents from the St. Felix case, however, reveals that the relatively small profit St. Felix’s gang made from its burglaries doesn’t capture the full scope of the harm they inflicted: In total, those court filings and DOJ officials describe how more than a dozen convicted and alleged members of the crypto-focused gang broke into the homes of 11 victims, carrying out a brutal spree of armed robberies, death threats, beatings, torture sessions, and even one kidnapping in a campaign that spanned four US states.

In court documents, prosecutors say the men—working in pairs or small teams—threatened to cut toes or genitalia off of one victim, kidnapped and discussed killing another, and planned to threaten another victim’s child as leverage. Prosecutors also describe disturbing torture tactics: how the men inserted sharp objects under one victim’s fingernails and burned another with a hot iron, all in an effort to coerce their targets to hand over the devices and passwords necessary to transfer their crypto holdings.

“The victims in this case suffered a horrible, painful experience that no citizen should have to endure,” Sandra Hairston, a US attorney for the Middle District of North Carolina who prosecuted St. Felix’s case, wrote in the Justice Department’s announcement of St. Felix’s conviction. “The defendant and his coconspirators acted purely out of greed and callously terrorized those they targeted.”

The serial extortion spree is almost certainly the worst of its kind ever to be prosecuted in the US, says Jameson Lopp, the cofounder and chief security officer of Casa, a cryptocurrency-focused physical security firm, who has tracked physical attacks designed to steal cryptocurrency going back as far as 2014. “As far as I’m aware, this is the first case where it was confirmed that the same group of people went around and basically carried out home invasions on a variety of different victims,” Lopp says.

Lopp notes, nonetheless, that this kind of crime spree is more than a one-off. He has learned of other similar attempts at physical theft of cryptocurrency in just the past month that have escaped public reporting—he says the victims in those cases asked him not to share details—and suggests that in-person crypto extortion may be on the rise as thieves realize the attraction of crypto as a highly valuable and instantly transportable target for theft. “Crypto, as this highly liquid bearer asset, completely changes the incentives of doing something like a home invasion,” Lopp says, “or even kidnapping and extortion and ransom.”