The more things change, the more they stay the same, and this saying is once again proving to be true. It used to be that people kept their money in the bank, as it was much safer than carrying it with them. Now, though, many people trust cryptocurrency wallets with all their money. People are also carrying these wallets at all times–on their phones. Yet, with a new trend dubbed crypto mugging by the British author, David Gerard, muggers can get all your crypto by stealing your phone.
News is coming in from around the world with people being jumped on the street, their phones taken. When they come home after the incident, they find their crypto hot wallet drained. Crypto muggings adapt traditional criminal activities to match the modern world.
At the moment, we know only 3 things for certain when it comes to crypto mugging:
- It is usually violent
- The attackers know what they are looking for
- Thefts are irreversible
As reported by the London Metropolitan police, these physical-digital attacks only make up a fraction of general criminal activity. In fact, more “traditional” crimes are still proliferating in the UK capital. The problem with crypto mugging, then, is not its frequency. Rather, it is that the police have few tools to combat it.
Even though crypto muggings are still rare, crypto investors will have to protect their phones and hot wallets from unwanted intrusions.
What Is Crypto Mugging?
The only difference between crypto mugging and traditional mugging is the target, and that is not a small difference. You do not have to be wearing thousands of dollars on you in cash and jewelry. The perpetrator cares about your millions hidden in your crypto wallet. Ans cryptocurrency will be much harder to trace.
The mugging itself happens in the same way. The thief will first scout you, then approach or jump you somewhere on the street. Here is where the crypto mugging starts. The criminals will take your phone, unlock it, and use it to access your crypto wallet. After that, they will send money to their account. Unlike traditional banking proceedings, this transaction is irreversible and very hard to trace.
Finally, courts will typically see crypto mugging as aggravated assault. Most countries will also prosecute this crime as a felony. Muggers will also not shy away from taking anything else of value you have on you and causing bodily harm.
At the moment, the issue is primarily affecting large financial centers such as London, where the crypto investor concentration is high. Yet, some occurrences were in the Greater London area as well.
Crypto Mugging and Cyber Pickpocketing
The key difference between crypto mugging and cyber pickpocketing is violence, just like it was with the non-digital predecessors. Cyber pickpockets will try to hack your phone with a sleight of the hand and steal funds through your Apple Pay or similar accounts. In contrast, muggers will take the phone by force.
Additionally, the shields and software protection designed to protect NFC devices do not work if someone else has your phone. Since the muggers can unlock your phone after scanning your face, they will forcibly take what they cannot finesse.
Same Tools, Different Purposes
The mugging reports across London are revealing how eerily similar these are to what we expect from a traditional mugging. In most cases, it is a mix of drawing victims in and simple ambushes.
Crypto mugging cases were mostly connected to the illicit drug trade. In one case, the mugger offered to type in their number on the victim’s phone. Instead, they used it to drain their account. In this case, the theft is possible to litigate, especially if the victim remembers the perpetrator. Yet, it is almost impossible to return the funds even if you know who stole them.
As is the case with traditional mugging, victims usually flock to promises of drugs, prostitution, or other illicit activities. These would require them to enter unlit alleyways or abandoned buildings. At that point, the victim is open to an attack and will usually comply with demands to prevent bodily harm.
In this case, the assailant would demand the victim unlock their phone and hand it to them. After that, they will send funds to a cryptocurrency account that they have access to.
Irreversible, but Not Untraceable
As described by Gerard, author of the book Attack of the 50 Foot Blockchain, this theft is lucrative for thieves because the process is irreversible once done. This is exactly why CryptoRom scams became possible and so frequent–they have no recourse against them.
The only way for rebuttal would be to gain access to the other crypto wallet. Yet, the owner of that wallet does not need to be the same person mugging you. You also cannot guarantee that they are in the same country.
That said, the process is not completely untraceable. In fact, the sender will still have the wallet address on their phone after the transaction. The criminals may use the same wallet again. That means the authorities could find the owner and gain access to their credentials, so some semblance of justice can be achieved.
By comparing accounts, the FBI was able to return millions of dollars in crypto to their rightful owners. Regretfully, Gurvais Grigg from the FBI admits that authorities will likely only search for large transactions. That means thefts worth only a couple thousand would go unnoticed and unprosecuted.
What Can Victims Do?
Preventing yourself from becoming a victim is always preferable to seeking justice. For crypto mugging, that might mean not having clear access from your main phone to your crypto wallet. As with traditional mugging, following similar safety protocols:
- Do not enter dark alleys
- Walk through well-lit streets at night
- Do not associate with criminal element
- Do not talk to strangers who say that they have something to show you
- Report anyone who appears to be following you to the police
- Call your local emergency lines (911 or 112 in the UK)