Hostage freed in exchange for $1.3m ransom in bitcoins

KIEV • Kidnappers in Ukraine have released an employee at a British-registered cryptocurrency exchange after getting more than US$1 million (S$1.34 million) in bitcoins as ransom, according to an adviser to the Ukrainian Interior Minister.

Mr Pavel Lerner, a leading analyst and blockchain expert, was abducted by unknown masked people on Dec 26, according to a statement by his company, Exmo Finance, on its website.

"This is the first such case in Ukraine linked to bitcoins," Mr Anton Gerashchenko, an adviser to Interior Minister Arsen Avakov, told Reuters on Friday.

It was unclear who paid the ransom. Mr Lerner's work at Exmo did not involve access to the financial assets of its users, the company said in a statement, adding that the platform was operating normally.

"At the moment, he is safe, and there was no physical harm inflicted on him," the statement said. "Nevertheless, Pavel is in a state of major stress, therefore, he will not provide any official comments in the coming days."

News of Mr Lerner's release came as bitcoin and other cryptocurrencies rebounded after two days of losses partly related to regulators toughening rules on digital currencies in an effort to curb excessive speculation.


This is the first such case in Ukraine linked to bitcoins.

MR ANTON GERASHCHENKO, an adviser to Interior Minister Arsen Avakov.

Many digital currencies surged in value this year., a local news website, had earlier reported that six gun-toting men in dark clothing and balaclavas had snatched Mr Lerner and pushed him into a minibus with stolen number plates.

Kiev police have begun a criminal investigation after a man was kidnapped in the Obolon district of the city, police spokesman Oksana Blyshchyk said by phone without revealing the name of the victim.

Exmo has 900,000 users as of December this year, according to its website.

"We would like to note that the story of Pavel's abduction has overgrown with rumours that might tamper with the official investigation," Exmo said in its statement.

"That said, Exmo refrains from any comments or suggestions of own versions of the possible scenario, in the nearest future."

Separately, the company announced on Thursday that it had been hit by a denial-of-service attack.


A version of this article appeared in the print edition of The Sunday Times on December 31, 2017, with the headline 'Hostage freed in exchange for $1.3m ransom in bitcoins'. Print Edition | Subscribe