Crypto kidnappings: Why ransom is now demanded in USDT and not cash

In the last few years, a disturbing trend has emerged in the world of organized crime – kidnappers demanding ransom payments not in traditional cash or gold, but in cryptocurrency, particularly USDT (Tether).

This shift is not just a matter of convenience. It reveals a deeper change in how criminals operate in the digital age, and it’s creating serious challenges for law enforcement across the globe, including in India.

Earlier, kidnappers typically asked for ransom in cash because it was untraceable. But physical cash is bulky, risky to handle, and harder to transfer without attracting attention. With the rise of cryptocurrency, especially stablecoins like USDT, criminals have found a safer, faster, and more anonymous method.

USDT, a stablecoin pegged to the US dollar, is particularly attractive to criminals. It doesn’t have the extreme price swings that Bitcoin or Ethereum face, so the value remains steady during negotiations. It is also easily available, widely accepted on global exchanges, and transactions can be done in minutes—making it ideal for a quick, low-risk payout.

USDT is built on blockchain technology, which means every transaction is recorded. But unlike bank transfers, these records are pseudonymous—linked only to wallet addresses, not to real names. Criminals use this to their advantage. They often demand that victims transfer the ransom to a wallet address, which they then quickly move through a series of other wallets or "mixers” (tools used to obscure the trail), making it difficult for police to track the money.

In India, the Enforcement Directorate (ED) and cybercrime units have noticed a spike in financial crimes involving USDT. For example, in 2023, Hyderabad police arrested members of a gang who had kidnapped a businessman and demanded Rs 3 crore in USDT. In another case, a Delhi tech startup founder was held hostage, with the abductors demanding ransom in crypto to avoid detection.

These operations are often transnational. The kidnappers may be based in India, but the crypto wallets and mixing services they use are operated from countries like Russia, China, or North Korea. Some of the crypto is even sent to accounts on the dark web or used to buy illegal items online.

What makes it worse is that crypto wallets are easy to create and don’t need identity verification on many platforms. Criminals also use fake SIM cards, burner phones, and multiple layers of communication to avoid detection. Even if the police track a wallet, by the time they reach it, the money is often gone.

Law enforcement agencies in India are trying to adapt. The ED, CBI, and state-level cybercrime cells are training officers in blockchain tracing and collaborating with global crypto analytics firms. However, the lack of strong international crypto regulations and India’s evolving crypto policy make it difficult to act quickly.

India is also working with Interpol and other international agencies to track suspects and freeze wallets. But success has been limited due to jurisdictional hurdles and the technical speed at which crypto can move.

Add TV9 English As A Trusted Source

Experts say the only way to counter crypto kidnappings is a mix of stronger regulation, better awareness, and international cooperation. Mandatory KYC (Know Your Customer) for crypto exchanges, real-time monitoring tools, and a global protocol to freeze suspicious wallets could help reduce these crimes.

Meanwhile, victims are urged not to engage directly with kidnappers. Authorities suggest immediately reporting to cybercrime units and avoiding any cryptocurrency transfer without expert guidance.