South Africa: Kidnappers Demand Bitcoin Ransom for Missing Nine-Year-Old

Criminals in South Africa have recently sent an anti-crime website and social media group an anonymous message demanding a 5 BTC ransom ($19,200) to return a missing nine-year-old girl.

The admin of the anti-crime group Western Cape Gangwatch reportedly received the anonymous message via an email that claimed that, in order to find the missing nine-year-old, the group was to send 5 BTC to a specific address within 48 hours, or communication would cease.

Gangwatch, an organization that reportedly regularly cooperates with law enforcement agencies in the country, is said to have attempted to trace the email, but was unable to. Speaking to local news outlet IOL, a spokesperson for the group stated:

We are trying to track it via the Bitcoin code, but believe the email the person is using was probably created at an internet cafe, which automatically deletes it and there is no IP address available either.

By “Bitcoin code” the spokesperson was presumably referring to the bitcoin address, which is available to the public on the cryptocurrency’s blockchain. At press time, the address given by the kidnappers has only received 0.0168 BTC on December 31, an amount that was moved shortly after being received.

The funds were then moved to an address that has received over 120 BTC, but has moved all of it and has been reported as fraudulent two times. From that point on, the funds appear to have been sent to a cryptocurrency exchange.

Gangwatch’s spokesperson added that those responsible for the crime will “hopefully realize the family’s circumstances and realize they cannot keep the girl for a lengthy period.” Speaking to the publication Candice Sobotker, from the Western Cape Missing Persons unit, added that the search for the girl, Linathi Titshala, is still ongoing.

We are pooling all resources including doing a search again in the coming week.

Detailing what happened the girl’s grandmother, Nabantu Matanzima, noted she slept at her home after a party and was then sent to her house, which was two doors away, on December 16. Since then, she hasn’t been seen.

Cryptocurrency-related crime seemingly isn’t new in the country. Last year the country’s authorities were investigating an $80 million bitcoin Ponzi scheme that collapsed after its founder disappeared. Notably, a survey has found that 60% of South Africans were “not aware” of cryptocurrencies as of July of last year.

QuadrigaCX Has Sent Its Remaining Crypto to 'Big Four' Ernst & Young

The embattled Canadian cryptocurrency exchange QuadrigaCX has recently sent the remaining cryptocurrency it had in its hot wallets to ‘big four’ auditor Ernst & Young, which has been monitoring the proceedings in its creditor protection case.

According to an official report Ernst & Young released called the “Second Report of the Monitor,” QuadrigaCX sent nearly all its cryptocurrency to the auditor on February 14, after conducting a few test transactions to make sure it wouldn’t send them to the wrong address.

In total, the cryptocurrency exchange transferred 51 bitcoin, 952 ether, 822 litecoin, 33 bitcoin cash, and 2,033 bitcoin gold to the auditor. At press time, these cryptocurrencies are worth little over $410,000, an amount Ernst & Young is set to “hold the cryptocurrency in cold storage pending further order of the Court.”

The test transaction QuadrigaCX has made are notable, as earlier a costly blunder saw it inadvertently transfer 103 BTC ($468,000) to its cold wallets. The exchange has been unable to access its funds in cold storage since its founder and CEO Gerald Cotten unexpectedly passed away in India.

Ernst & Young’s report has also given the exchange’s creditors updates on its fiat holdings. It notes there are thee main sources: a payment processor called Costodian that holder about $25 million CAD in bank drafts, Stewart McKelvey which holds about $5.8 million CAD in bank drafts, and other amounts held by various third-party processors.

Costodian has reportedly already transferred about $20 million CAD to Ernst & Young, but is holding onto the remainder, and has claimed QuadrigaCX owns it $778,000 CAD in processing fees.

$145 Million Locked Away

The Canadian cryptocurrency exchange, as mentioned above, has been locked out of its cold storage wallets since its founder and CEO passed away, as he managed the operation through his laptop.

His wife Jennifer Robertson has since filed an affidavit where she revealed Cotten was single-handedly managing the exchange’s transactions, and that after he passed away no one was able to do so. Since then, the Supreme Court of Nova Scotia has granted QuadrigaCX creditor protection, and appointed Canadian law firms Miller Thomson and Cox & Palmer to represent its customers in the upcoming proceedings.

As CryptoGlobe covered, QuadrigaCX has already run out of funds, and a look into Cotten’s way of managing the exchange in the past has suggested users’ funds can be stored in paper wallets. The exchange’s downfall has cost at least one cryptocurrency enthusiast his $420,000 life savings.

Notably, blockchain researchers have released data that suggests QuadrigaCX didn’t have any funds stored in cold wallet, and even found suspicious transactions to other exchanges, including Poloniex, Bitfinex, and ShapeShift.