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The case appears to be the first ransom demand in South Africa made in virtual currency. Photograph: Chesnot/Getty Images
The case appears to be the first ransom demand in South Africa made in virtual currency. Photograph: Chesnot/Getty Images

South Africa kidnappers make ransom demand in bitcoin

This article is more than 5 years old

Abductors of boy, 13, left note demanding £92,000 worth of cryptocurrency for his release

A gang that kidnapped a South African teenager from a playground at the weekend have demanded a ransom in bitcoin worth about $123,000, police have said.

The 13-year-old boy was taken in the town of Witbank in the eastern province of Mpumalanga while he was playing with two friends near his home. Witnesses said a Toyota Corolla pulled up nearby and the teenager was dragged in and driven away.

“We are investigating a case of kidnapping that happened on Sunday in Witbank. There was a demand that was made that the parents should deposit cash in bitcoins,” the police spokesman Leonard Hlathi said on Tuesday. Local media said the ransom note was left at the scene.

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What is bitcoin?

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Bitcoin is a 'cryptocurrency' – a decentralised tradeable digital asset. Invented in 2008, you store your bitcoins in a digital wallet, and transactions are stored in a public ledger known as the bitcoin blockchain, which prevents the digital currency being double-spent. 

Cryptocurrencies can be used to send transactions between two parties via the use of private and public keys. These transfers can be done with minimal processing cost, allowing users to avoid the fees charged by traditional financial institutions - as well as the oversight and regulation that entails. The lack of any central authority oversight is one of the attractions. 

This means it has attracted a range of backers, from libertarian monetarists who enjoy the idea of a currency with no inflation and no central bank, to drug dealers who like the fact that it is hard (but not impossible) to trace a bitcoin transaction back to a physical person.

The exchange rate has been volatile, with some deeming it a risky investment. In January 2021 the UK's Financial Conduct Authority warned consumers they should be prepared to lose all their money if they invest in schemes promising high returns from digital currencies such as bitcoin.

In practice it has been far more important for the dark economy than it has for most legitimate uses. In November 2021 it hit a record high of more than $68,000, as a growing number of investors backed it as an alternative to other assets during the Covid crisis.

Bitcoin has been criticised for the vast energy reserves and associated carbon footprint of the system. New bitcoins are created by “mining” coins, which is done by using computers to carry out complex calculations. The more bitcoins that have been "mined", the longer it takes to mine new coin, and the more electricity is used in the process.

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“This is a kidnapping … We demand ransom of 15 bitcoins to be paid into the below bitcoin wallet address to secure your child’s safe release – non-negotiable,” the note reportedly read.

The first deadline for payment of part of the ransom passed on Monday night. In the note, the kidnappers threatened to kill the boy if their demands were not met. A police official said boy’s parents were “going through trauma”.

“They don’t even know what this bitcoin is. They’re devastated and you can see they’re worried and asking themselves: ‘Where’s our son?” local media quoted the official as saying. The boy’s mother made an emotional appeal on Tuesday, pleading with the kidnappers to “bring back [her] son”.

Police in South Africa have reported a recent rise in kidnappings, although it is usually wealthy businesspeople who are targeted. The latest case appears to be the first ransom demand in made for a cryptocurrency in the country.

In December 2017, an employee at a cryptocurrency exchange in Ukraine was released by kidnappers after a ransom of more than $1m worth of bitcoins was paid.

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