Crypto Breaches Spark Kidnapping Fears, Arrington Warns

Coin WorldTuesday, May 20, 2025 10:54 am ET
2min read

TechCrunch founder Michael Arrington has issued a stark warning following a recent data breach at

, stating that the incident "will lead to people dying." This alarming claim comes amidst a surge in kidnapping attempts targeting high-net-worth cryptocurrency holders, raising serious concerns about the safety and security of digital asset owners.

Arrington's comments highlight the potential human cost of such breaches, which can expose sensitive information such as home addresses and account balances. He emphasized that the misery caused by these incidents far outweighs the financial losses, which Coinbase estimates to be around $400 million. Arrington also called for stricter penalties for executives who fail to adequately protect customer data, suggesting that prison time may be necessary to ensure better security measures.

Coinbase recently announced that cybercriminals attempted to blackmail the exchange for $20 million in Bitcoin in exchange for not releasing stolen customer data. The company refused to pay the ransom and instead offered a $20 million reward for information leading to the arrest and conviction of the attackers. Coinbase has also pledged to reimburse any customers who were tricked into sending funds to the attackers. The U.S. Justice Department has opened an investigation into the data breach.

Arrington, who is also the founder of venture capital firm CrunchFund and hedge fund Arrington Capital, expressed his long-term investment in Coinbase but did not specify the nature of his investment. He believes that the breach has put people in immediate physical danger, as it exposed sensitive information including names, addresses, phone numbers, emails, and government-ID images.

The recent wave of kidnapping attempts targeting high-net-worth crypto holders has heightened concerns over the safety of digital asset owners. In January, Ledger co-founder David Balland was abducted from his home in France alongside his wife. The pair were held captive for roughly 24 hours, with the kidnappers mutilating Balland’s hand as part of their ransom demand. In March, popular streamer and OnlyFans personality Kaitlyn “Amouranth” Siragusa was the victim of a home invasion by three armed attackers who physically assaulted her while ordering her to transfer her Bitcoin to them. In May, the father of a crypto millionaire was rescued by authorities after being held hostage for days, but not without having his finger severed by the kidnappers. A week later, there was an attempted but failed kidnapping of a woman and her child, relatives of a leading figure in the crypto industry.

Arrington believes that crypto companies handling user data need to be much more careful. He tweeted, “Combining these KYC laws with corporate profit maximization and lax laws on penalties for hacks like these means these issues will continue to happen. Both governments and corporations need to step up to stop this. As I said, the cost can only be measured in human suffering.”

Former Coinbase chief technology officer Balaji Srinivasan disagreed with Arrington’s position, arguing that the problem lies with regulators forcing KYC data collection onto unwilling companies. Srinivasan suggested that with zero-knowledge (ZK) technology, there would be no need for KYC. Arrington responded by saying, “When enough people die, the laws may change.”