Bitcoin robberies hit New York

A bitcoin ATM machine is shown at a restaurant in San Diego, California.

A bitcoin ATM machine is shown at a restaurant in San Diego, California.  (REUTERS/Mike Blake)

Bitcoin might make money transactions easier in the digital age, but it’s also brought about another way for people to get robbed. Dwayne Richards, a New York City-based firefighter, was the most recent victim of a bitcoin robbery, reports the New York Business Journal. Richards was stabbed and robbed by the thieves, individuals he was in contact with for a bitcoin-for-cash exchange in Williamsburg, Brooklyn. He refused to comment on the incident to the New York Observer.

Bitcoin is an online payment system that was designed to facilitate peer-to-peer money transactions that skip a mediating institution like a bank. Naturally, bitcoin-related crime would normally be of the white collar variety, but the Observer reports that the attack on Richards is the latest in a series of similar incidents.

The paper reports that Dean Katz, who independently works as a bitcoin exchanger in New York, was held up at gunpoint in Queens. A man reached out to him hoping to use his services because he said he was planning to gamble during the Super Bowl. He threatened Katz with a gun and forced him to make an $8,500 bitcoin transfer. He then took $3,500 in cash before leaving the scene.

Katz said that he has since heard from other bitcoin exchangers about similar incidents. Despite serving as an easy, online way to make financial transactions, it is sometimes easiest to make exchanges in person. For exchangers like Katz, having a bitcoin account verified online can be a weeks-long process. Meeting in person can build trust, especially given how easy it is for people to commit fraud or misrepresent themselves online.  

Given how relatively new bitcoin is, and how few safeguards are currently in place, Katz said that users have to exercise caution.  Katz suggested that ideally there will be centralized bitcoin centers in the future, where exchangers can make safe, public transactions.

“Right now, it’s like the Wild West,” Katz told the Observer. “Stagecoach robberies are going to happen.”