Man Loses £750,000 in ‘Cryptomugging’
The UK has seen an increase in cases of “cryptomugging” recently, where robbers target cryptocurrency investors and snatch their phones out of their hands.
According to The Independent, there have been two reported cases. In one case, a man named Toby Atkinson had his unlocked phone snatched from his hands while he was heading home after work. Atkinson started investing in cryptocurrency when his mother gave him £100 for his 16th birthday. Now 30 years old, he claims to have turned that pocket money into “well over a million” by being an early adopter. He tried to chase down the thief but was confronted by two more gang members armed with a knife and a machete. Over the next 40 minutes, they forced Atkinson to transfer £750,000 (almost a million USD) from his accounts.
Atkinson stated that he usually kept his crypto “on a cold storage, on a USB stick.” He had taken it off to make a deposit on a house. He said, “It’s not just a case of money, but everything I hold privately that was stored on my phone. I felt physically and emotionally assaulted.”
In a similar incident, a man named Sam Kelly, who had invested a significant amount of money, was ordering an Uber home when a man ran past him and snatched his unlocked phone. Kelly tried to follow the thief but noticed that two others were following him. He quickly deactivated his accounts when he got home, but all his money was already gone. He said, “I still don’t know how they managed to do it so quickly.” He also mentioned that he had enabled security settings on his accounts, and the thieves might have used “passwords stored elsewhere in the phone.”
Despite the general opinion that the police are unable to help in such cases, the report states that they do have tools to track stolen assets when the thieves attempt to cash them out. On average, 225 phones are stolen in Britain every day, but the recent focus has been on crypto apps. According to David Gerard, the author of “Attack of the 50 Foot Blockchain,” crypto apps are vulnerable compared to online bank accounts. He said, “It is so stupidly brittle. These are not reversible transactions. Would you go down to the pub with £10,000 cash in your pocket? Probably not. You need to treat crypto like a big pile of money.”
Atkinson and Kelly both reported the incidents to the police but had a negative experience with unhelpful officers. However, Phil Ariss, the former Crypto Lead for the NPCC Cybercrime Programme and Director of UK Public Sector Relations for TRM Labs, mentioned that the police do have special tools to track stolen assets when they are cashed out. Cryptomugging is not a new phenomenon, as reported by The Guardian two years ago. The technology has advanced significantly since then. Additionally, a UK gang was recently sentenced to lengthy prison terms for kidnapping, torturing, and extorting a crypto investor.
Kelly filed complaints with the Financial Ombudsman Service and the two unnamed companies whose apps were accessed by the thieves, despite the security measures. He managed to recover “well over half” of the funds. However, Atkinson couldn’t file similar complaints because he made the transactions himself during the cryptomugging, even if under threat.