Security is paramount in crypto. “Keep your hardware wallets safe,” we're told. “Keep your private keys safe.” “Keep your seed words safe.” “Keep your computer safe.” This list could go on almost indefinitely, and while you might be forgiven for assuming that it contained only objects of an electronic or cryptographic constitution, you'd be wrong. Because one of the most important links in this chain of security is your own self.

Yes, what good is a securely held private key if thieves force you at gunpoint to tell them what this key is? This might seem like an improbable risk for anyone with only modest savings in crypto, but for anyone with hundreds of thousands or even millions of dollars worth of Bitcoin in their wallets, it's all too real. The kidnappings of Pavel Lerner and Skycoin's “Synth” underline this point forcefully, so it's no wonder that an increasing number of crypto millionaires and CEOs are choosing to enlist the services of personal bodyguards.

However, while it's clear that a large number of “cryptonaires” currently make use of bodyguards, it's likely that third-party solutions to personal security may soon emerge and make them less necessary. It's also possible that the safety of high-profile figures will improve in parallel with an increase in regulations and the standardization of the industry, since, in some cases, it would seem that threats to security are associated with the questionable business practices of those threatened.

Being your own bank carries risks

Tadas Kasputis is one of the many cryptocurrency executives who now employs the services of personal bodyguards. For a while, the founder of CoinStruction and the ExMarkets crypto-exchange didn't see any use for them, but he tells Cointelegraph that this changed in 2015, after he was kidnapped.

"Yes, actually I was kidnapped in my hometown Kaunas city in Lithuania," he said. "They came out of nowhere, pushed me into a van and drove around town trying to get me to tell them my bitcoin wallet passwords. Their plan did not work and they're now facing charges in Lithuanian court. That was the only time it happened, but it was enough."

As a result of this incident, Kasputis states that he "decided to put extra security measures to protect me and my family," although he didn’t specify the extent of the protection he now pays for (perhaps for security reasons). And he's not alone in taking additional security measures, because even though most cryptocurrency executives are understandably sheepish when it comes to divulging specific details, there's ample online record of such execs using bodyguards.

Most notably, Ethereum co-founder Anthony Di Iorio is one of these figures. While he didn't reply to a request for comment, a Fortune interview from June describes him walking around Manhattan with a private bodyguard, while a November article from The Globe and Mail offers further detail, revealing that he employs seven full-time bodyguards.

"Being my own bank, there are consequences — I’m at risk," he told the Canadian newspaper, offering a vivid indication of just how threatened some of the more conspicuous figures in the cryptocurrency industry feel.

A few of the biggest names in the industry have taken Di Iorio's lead and publicly stated how many bodyguards they employ and in what specific capacity (i.e., whether full-time or not). Still, it's known that Litecoin creator Charlie Lee, for example, has his own "head of security," John Kim, who — in between acting as Lee's personal bodyguard — also doubles as an "evangelist" for the altcoin. And as with Kasputis, there are many other lesser known crypto figures who have been known to use personal security, such as "the Dollar Vigilante" Jeff Berwick and the now-jailed Josh Garza (who was known to attend conferences with two bodyguards in tow).

Berwick explained to Cointelegraph:

“For my entire life I've deemed it my own duty to supply protection to myself and my family. For that reason, aside from being a trained fighter and often armed, I always utilize private security services in one way or another.  I would never, under any circumstance, leave my security up to a centrally planned, communist style, bureaucratic and slow, dog killing, kidnapping and extortion racket like government police.”

Admittedly, a list of five names doesn't offer a very comprehensive window into just how many people in crypto actually walk around with hired muscle. That said, bodyguard firms have been reporting that they're increasingly working for people in the industry, with a Bitcoin.com article from last year showing that this is especially true in Russia. Yet, this is also the case elsewhere in the world, with the United Kingdom-based Spetsnaz Security International, for instance, informing Cointelegraph that it does have clients in the crypto industry.

"I do provide bodyguard services for individuals who work in the cryptocurrency industry," says director Fidel Matola, who, unfortunately, wouldn't share the number of such individuals his agency works for. Nonetheless, there's little doubt that a not- insignificant proportion of people in the industry do use personal security, even if some of the most notable members of the crypto elite still apparently don't (e.g., Vitalik Buterin).

“Most people I know are anarcho-capitalist and therefore use private security regularly,” notes Berwick, who currently resides in an informal anarchist community in Acapulco and organizes the annual Anarchapulco event. Although he adds, “I haven't particularly noticed an increase in this usage amongst people I know.”

Eastern Europe or the rest of world?

While it isn't controversial to assert that crypto millionaires (or billionaires) do use bodyguards, there are a number of questions surrounding this phenomenon that aren't so obvious. For one, it would be useful to know where in the world bodyguards are most widely used by members of the crypto elite. And while it's tempting to suggest that the answer to this question is Russia and Eastern Europe, people who actually live in this region aren't so sure. According to Kasputis:

"I don't know the statistics and aren't too concerned about them. Perhaps the cases are more common in Eastern Europe right now, but the cryptocurrency penetration and popularity in this region is also higher than, say, in South America, right? Maybe the geographical scope will change."

Given that there aren't any statistics on this subject, it's very difficult to conclude anything with any certainty, particularly when Di Iorio is based in Canada, for example, when Berwick is based in Mexico, and Garza was based in the U.S.

And Berwick, for his part, believes that it’s not Eastern Europe that’s the most dangerous area in the world for cryptocurrency holders, but rather, the United States. Although, in his case, he regards the danger posed in the US in more general terms, and not restricted solely to Bitcoin or Ethereum holders who might be robbed at gunpoint:

“The most dangerous place in the world, in my opinion, is the US. Nearly everyone in the US gets extorted for half the money they make every year and are extorted on thousands of other items as well. When not being extorted they live in the world's largest police state where most people at one point or another are kidnapped and thrown into rape camps [prisons]. I try to avoid going to the US for this reason.”

Despite Berwick’s impassioned testimony, it's interesting to note that Lerner was kidnapped in Kiev, Kasputis was kidnapped in Lithuania, and that there have been numerous instances of people being robbed for crypto in Moscow over the past couple of years. There are, then, good reasons to suspect that bodyguards might be more common in Eastern Europe, even if the the rest of the crypto world (particularly in the Americas) probably also has its fair share.

Third-party protection

Cases of kidnap and robbery are highly disturbing for anyone with significant crypto holdings, and it might seem that the only response to such incidents is to turn to the nearest reliable personal security agency. But even if this may be a perfectly rational response right now, it's possible that it might not be necessary in the near future. As Kasputis argues:

"I think soon enough there will be accessible solutions in the cryptocurrency space which will allow putting your holdings into trusted-third-party protection similar to what we have bank vaults right now. There are still many business opportunities out there, one, for example, being crypto wills and arrangements of the digital asset and private key transfers upon death. I am not the one to evaluate the QuadrigaCX controversy, but it is a good example of that."

This might simply sound like speculation, but there is, in fact, a move toward "third-party protection" for cryptocurrencies in the security industry. Back in October, the London-based multinational security company G4S announced that it had launched a "vault storage" service for crypto. The corporation has copious experience protecting and storing money and high-value items, and it's now using this experience to provide a service that breaks up a client's cryptocurrency into "fragments," which are then kept in a number of high-security vaults.

By "fragments," G4S is presumably referring to private keys and/or seed words rather than cryptocurrencies themselves. Regardless, G4S Risk Consulting's senior risk analyst, Dominic MacIver, noted at the time that this service isn't being proposed merely as a bulwark against hacking, but also against physical robbery:

"Offline storage has become a more established and secure way of storing crypto-assets. At the same time, violent robberies and kidnappings in recent years have shown that the sector is still exposed to conventional criminal threats. In collaboration with our client, our security solution is built on a foundation of 'vault storage'. Access to these sites is heavily restricted with multiple layers of security and robust protocols, and only when all the fragments are combined with specific technology can they unlock access to the value stored within.”

And aside from G4S, there are signs that other companies are in a “race” to provide custodial services for cryptocurrencies, as CNBC put it in an article from September. Chief amongst these is BitGo, which, in that same month, received a license from the South Dakota Division of Banking to act as a custodian for the holdings of institutions and big investors. And they have since been joined by the likes of Gemini, ItBit and Coinbase Custody, indicating that you don’t necessarily need to store your holdings in your own wallet and hire a bodyguard in order to preserve your crypto-wealth.

The correlation between threats and fraudulence

One other thing that might, in the future, reduce the need for bodyguards is the regulation and standardization of the cryptocurrency industry. If the industry becomes more normalized, if all exchanges are required to be licensed and maintain standards of best practice, and if legislation brings crypto closer to the mainstream, then there may be at least a slight reduction in the threat posed to crypto execs. That’s because a number of cases of kidnapping and robbery appear to be related to exchanges that were potentially fraudulent.

For instance, in June 2018, Skycoin’s CEO, known as Synth, was robbed at his home in China. Nine individuals — apparently from the company’s marketing team — reportedly broke into his house, assaulted him and his girlfriend and stole 18.88 Bitcoin and 6,466 Skycoin (there is a police report that confirms parts of Synth’s story). What makes this more interesting is that Skycoin had been accused of being a scam by, among others, the Next Web and altcoins.com, largely because it was offering investors the chance to buy a miner in order to to mine a coin (Skycoin) that was, in fact, premined. There were also indications that insider trading was taking place within the company, and while these can’t be confirmed, the potential of there being a fraudulent environment is important here. That’s because, if Skycoin was fraudulent, this could have contributed to the feeling among potential kidnappers/robbers that they could steal Synth’s crypto with impunity, given that Synth may have been wary about exposing too much of his business to public scrutiny.

Similarly, in May 2018, two bodyguards working for MasBitcoin CEO Jorge Sanchez were gunned down in Cerritos, Mexico. In this case, it was widely accepted that MasBitcoin was a Ponzi scheme, which had closed in March 2018 after operating for around a year. Once again, it seems that the fraudulence of MasBitcoin had made this crime likelier, and given that Sanchez had promised to exact revenge in a bizarre video posted to Facebook, it’s possible that the murderers were people known to him. In other words, they were aware that MasBitcoin was a scam, and they were therefore more willing to regard Sanchez as fair game for an attack or robbery.

And then there’s Garza, who was the CEO of the GAW Miners Ponzi scheme and who also roamed around in the presence of bodyguards. It’s arguable that he wouldn’t have felt the need to do this if he had been running a legitimate business that wasn’t defrauding people of money. But the fact that he was scamming people out of money made him a target, and it’s possible that he was well aware of this.

Of course, this isn’t to say that many or most of the crypto execs with bodyguards are also running fraudulent or deceptive businesses. However, there is at least a moderate correlation between questionable business practices and the threat to personal security, so it’s likely that once crypto becomes more regulated, the need to enlist bodyguards will partially decline. And it will also decline when more security companies like G4S launch reliable storage and custodial solutions for crypto. But until then, the industry’s elite will need to continue looking out for their own personal safety, since they still remain the final line of defense between criminals and their crypto.