Ugandan Crypto Founder Abducted and Forced to Transfer $500,000 in Crypto
In a harrowing incident that underscores the growing peril surrounding cryptocurrency ownership, Festo Ivaibi, the founder of Mitroplus Labs, was abducted near his home in Kampala, Uganda, and coerced into transferring cryptocurrencies valued at approximately $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 incident was reported on the Afro Token Project’s official account on X, detailing the distressing ordeal and confirming Ivaibi’s safety following the event. The company emphasized the attack’s impact not just on Ivaibi but on the broader vision of 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 is part of a disturbing rise in what the crypto community refers to as “wrench attacks,” where physical violence or threats are used to steal digital assets. Mitroplus Labs highlighted that this was not an isolated incident, with over 48 similar attacks reported within Uganda alone, many of which have gone unreported due to the influence of the criminal rings involved.
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. Additionally, 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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