2 men accused of violent robberies, stealing $6.5M in cryptocurrency in Bay Area, LA appear in court

SAN FRANCISCO (KGO) -- Two Tennessee men accused of violently stealing $6.5 million in cryptocurrency in the Bay Area and Los Angeles appeared before a federal judge in San Francisco on Tuesday.

According to an indictment, the men, along with another suspect, posed as UPS, pizza delivery and DoorDash drivers to gain access to victims' homes. Prosecutors allege they were armed with guns, duct tape and zip ties, and in at least one incident forced a victim to give up cryptocurrency account information while threatening to cut off the victim's finger.

The indictment outlines four victims in total, located in Los Angeles, San Francisco, San Jose and Sunnyvale. It also alleges the suspects struck a victim in the head with a firearm when the person did not comply. The men face multiple charges, including attempted kidnapping.

The case comes amid increased attention on crimes involving cryptocurrency demands. In a separate case of the disappearance of Nancy Guthrie, unverified notes sent to media outlets demanded the family pay a ransom in bitcoin.

However, one expert says, violent incidents involving cryptocurrency remain relatively uncommon compared to other types of crypto-related theft.

"The majority of thefts and losses that we see related to cryptocurrency aren't these types of kidnapping still," said Paul Sibenik, CEO of Cryptoforensic Investigators. "In many cases, it's still some remote hacker that is unknown to the victim who they've never met, whether it's some sort of fishing-related incident or some seed phrase compromise through cloud storage-related breach."

Danny Nelson, of Chainalysis, a company that helps governments and businesses investigate crypto crime, said there is a misconception that cryptocurrency enables criminals to evade detection.

"I think there's also this misperception that crypto is a good technology to steal people's money and to get away with it, because maybe it's anonymous, or it's less understood," Nelson said. "And in reality, it's the opposite. Anytime you move crypto, it's recorded permanently on the blockchain, which is the technology that crypto exists on. And that means that if you're an investigator, if you're law enforcement, if you're a company. You can go into those records and follow the money, and you can understand where it's flowing, and then you can take steps to stop it and to catch the people."

Nelson added that people with large cryptocurrency holdings should keep a low profile to avoid becoming targets.

The suspects are due back in court in June and July. If convicted, the men face a maximum sentence of 20 years in prison.