Ugandan Crypto Founder Abducted and Forced to Transfer $500,000 in Crypto
A harrowing incident has highlighted the growing peril surrounding cryptocurrency ownership: armed assailants abducted Ugandan crypto founder Festo Ivaibi, the head of Mitroplus Labs, near his home in Kampala, Uganda, and forced him to transfer cryptocurrencies worth around $500,000.
Details of the Abduction
The abduction occurred on May 17 on Bunamwaya Road, a usually quiet area in Kampala. The assailants, dressed in military uniforms and posing as members of the Uganda People’s Defence Forces (UPDF), intercepted Ivaibi. They forced him at gunpoint to unlock his crypto wallets and transfer a significant amount of cryptocurrency, including a portion of Afro Token, a meme coin developed by his company on the Tron blockchain platform, SunPump.
The Afro Token Project’s official account on X reported the incident, detailing the distressing ordeal and confirming that Ivaibi remained safe afterward. The company stressed how the attack affected not only Ivaibi personally but also undermined the broader vision for cryptocurrency’s potential in Uganda.
Impact on Afro Token and Crypto Market
Following the attack, Afro Token’s market value plummeted by approximately 16.7%, with its market cap reducing to about $1.6 million from a high of over $7.3 million in December of the previous year, according to data from DEX Screener.
Increasing Trend of ‘Wrench Attacks’
This incident in Uganda reflects a disturbing rise in so-called “wrench attacks,” where criminals use physical violence or threats to steal digital assets. Consequently, the crypto community has increasingly raised concerns about this trend. Mitroplus Labs reported that this case wasn’t isolated — over 48 similar attacks have occurred in Uganda alone. However, many victims chose not to report them, fearing retaliation from the powerful criminal rings behind these crimes.
For example, earlier instances this year include the brutal kidnapping of David Balland, co-founder of Ledger, a hardware wallet manufacturer, and a crypto broker who sustained injuries while escaping his captors. Furthermore, the father of another crypto entrepreneur was recently rescued in a police operation after kidnappers demanded a ransom nearing $8 million in cryptocurrency.
Expert Insights on Enhancing Security
Michael Pearl, Vice President of Strategy at blockchain security firm CyVers, shared insights with Decrypt on potential safeguards against such attacks. He recommended the implementation of multi-factor authentication and monitoring for unusual transaction patterns, which could trigger alerts or temporary freezes to protect assets.
Harry Halpin, CEO of decentralized VPN service Nym, pointed out the risks posed by the increasing demand from governments for transparency and identity data in the crypto space. Such data, if leaked, could become a tool for criminals targeting crypto holders. Halpin advocates the use of VPNs among other security measures to shield crypto transactions and identities.
Call for Better Protection Measures
The recurring theme in discussions following these incidents is the urgent need for better coordination between physical safety protocols and digital asset protection strategies. As the value of cryptocurrencies continues to attract attention, the physical safety of digital asset owners remains a critical concern that needs addressing at both individual and regulatory levels.
For more insights into securing digital assets and the latest trends in blockchain security, visit our detailed articles on Web3 and AI and Blockchain’s role in various sectors.
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