BTCManager Logo with clear background. Orange and white font.

BITCOIN PRICE: 8,169.27     HIGH: 8,284.00     LOW: 8,058.69

=
BTCManager.com
advertisement
advertisement
advertisement
#TRENDING STORIES
Next Event

Baltic Honeybadger 2017 • November 25-26, 2017

The Baltic Honeybadger conference is the first major event in Latvia dedicated to Bitcoin and the technologies built around it.…

Click for more details
advertisement
BTCManager.com

Hackers Extort Clients of Bank in Liechtenstein, Demand 10 percent of Balances

by

Hackers Extort Clients of Bank in Liechtenstein, Demand 10 percent of Balances

Liechtenstein is known as a tax haven. Hackers claim to possess the bank account data of the clients of the country’s bank Valartis. To not report tax crimes they demand that the customers pay a ransom of 10 percent of their balance, in bitcoin.

The principality of Liechtenstein is one of the tiniest nation states of the world. It is a small spot between Austria and Switzerland that became independent through an odd, historic accident. Liechtenstein is home to nearly 40,000 citizens, has no birth clinic, but has 15 banks and has the highest income per capita in the whole world.

Globally known for being a tax haven, Liechtenstein has pledged to fight tax evasion but the European Union still has it on its list of the world’s most important tax shelters. Strict bank secrecy and the generous tax laws make Liechtenstein an attractive place for the richest to protect their wealth against the greed of financial authorities.

A lot of the customers of Liechtenstein’s Valartis bank might no longer be satisfied with their choice. Instead of dealing with financial officials, now they have to deal with a group of hackers. On November 25, the bank received an email from a digital extortionist which informed them that hackers gained a crucial insight into their bank accounts and now know their balance and the purpose of the bank account – to hide taxes and to invest black money.

The hacker threatens to share the data with tax authorities and the media. To prevent this leak the clients must pay a ransom by December 7, “We thought long about the question, which amount is fair and appropriate”, the German-written mail continues:

“It was important for us to find a solution, that is profitable for us but doesn’t hurt you too much. We think an amount of 10 percent of your balance is appropriate.”

 

The hackers consider this a good deal, because “assumed this wealth is not taxed, a tax back payment would be significantly more expensive.”

advertisement

The means of payment comes as no surprise, “Since anonymity is for us as important as for you, we can only accept bitcoin as a means of payment. This guarantees complete anonymity for both parties.” The clients of the bank are then prompted to get accounts on platforms which sell bitcoin.

The victims of this extortion have little hope that it is simply a fake attempt to get money. Only two weeks ago, the Valartis bank fell victim to a hack. The biggest daily news organization in Liechtenstein, called “Vaterland”, reports, that “the attacker has taken information about transaction receipts before May 2013 via e-Banking.” The core system of the bank was not affected, thus the hackers could neither manipulate bank transfers nor gain insight into current account balances. But it is possible that the information they have obtained is sufficient for the tax offices to begin investigating.

The number of clients, and the volume of money, involved remains unknown. You could speculate that it might be significantly fewer people, and smaller amounts, than with the famous “2008 Liechtenstein tax affair”, when an employee of the larger LGT Bank sold customer data to the Federal Intelligence Service of Germany. The tax affair resulted in more than a thousand investigations in Europe and the USA; the German treasury alone earned hundreds of millions of euros through penalties and back payments.

The case of Valartis is smaller. The bank is the sixth-largest bank of Liechtenstein. It manages around 4 billion Swiss Franc. It is hard to estimate the proportion of these funds which would be considered ‘black money’ and how much is known to the hackers.

One indicator to measure the consequence of the hack is, however, visible for everyone: the price of bitcoin. If the hack results in a significant ransom, maybe something in the $40-60 range will emerge and should be noticeable from the charts.

Join our Telegram Channel!