Several small, local pizzerias were recently targeted by an anonymous group of extortionists who threatened that they will post bad reviews on Yelp.com if they didn't fork over 1 bitcoin.
Extortionists are taking advantage of Bitcoin's anonymity
Thanks to Bitcoin and social media, extortionists can now be completely anonymous. Several pizza parlors, including the 900 Degrees Neapolitan Pizzeria in New Hampshire, received a threatening letter the other day. The letter was a "Notice of Extortion" and it informed the owner of the pizza place that if they didn't pay 1 bitcoin, their business will be ruined.
The owner posted the notice on Facebook and said:
"This is a new one on me, you guys. Ps. What the heck is a BitCoin??"
The threat was extremely aggressive, as the extortionists claimed they will start posting bad reviews on Yelp.com, report fake violent crimes, file Better Business Bureau complains, and drug activity on the grounds. If the owners failed to meet the deadline, the price would go up 3 Bitcoin. This means that the extortion amount could exceed $US 1,800 at today’s prices.
Interestingly, the August deadline might be the cyber criminals’ way of giving the owners a grace period to understand Bitcoin and open a Coinbase account. On June 26, general manager of Pizza Pirates in Pomona, California, Sandra Alhilo, received the same notice. In a phone interview she said:
“At first, I was laughing because I thought it had to be a joke. It was funny until I went and posted it on our Facebook page, and then people put it on Reddit and the Internet got me all paranoid.”
The cyber criminals who came up with the idea of extorting people for bitcoins might be creative, but they haven't thought things through very well. All letters were sent through the US Postal Office, which could increase the chances of catching the perpetrators eventually.
Researcher at the International Computer Science Institute, Nicholas Weaver, talked about these extortions using Bitcoin. They don't cost a thing and they assure a handsome bribe for perpetrators.
“From the fraudster’s perspective, the cost of these attacks is a stamp and an envelope. This type of attack could be fairly effective. Some businesses — particularly restaurant establishments — are very concerned about negative publicity and reviews. Bad Yelp reviews, tip-offs to the health inspector…that stuff works and isn’t hard to do.”
Unfortunately, many businesses may fall into this kind of trap, especially small, local companies who cannot afford the negative publicity and bad reviews. Hopefully, new methods will be developed in the future to prevent criminals from hiding behind the blockchain without sacrificing privacy and anonymity for the users.