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David Carlisle, an important cryptocurrency intelligence agent, argues that criminal gangs specifically target countries with little or no jurisdiction over bitcoins and hundreds of so-called "altcoins". Only recently, two high-profile abductions have seen gangs attempt to extort more than 8 million pounds from the families of high-profile victims. In Costa Rica, the owner of the 5-day betting site – William Sean Creighton Kopko – was kidnapped at the end of last year before a gang demanded almost a million dollars worth of bitcoins. Kopko's family eventually paid the ransom, but Kopko himself is still missing, despite 12 people being arrested for their alleged involvement in the kidnapping.
Meanwhile, in Norway, billionaire wife Tom Hagen is currently in the hands of kidnappers demanding € 9 million in Monero private currency.
Anne-Elisabeth Falkevik Hagen was abducted from the family home on the outskirts of Oslo on October 31st.
The Norwegian police had controlled the accident until a few days ago in the hope that new evidence would come to light.
However, the police commander who led the investigation decided to make it public, revealing that he had urged the family not to pay.
The inspector Tommy Broske told Express.co.uk: "There were requests for redemption and serious threats.
"The police have so far advised the family not to meet the requirements".
Both high-profile kidnappings led David Carlisle – a former US Treasury adviser on terrorist financing, financial crime and encryption activities – to put pressure on governments around the world to quickly introduce regulation.
He said: "Cryptocurrency enables certain types of crime effectively and others less.
"One of the things about extortion with cryptocurrency that's convenient for kidnappers is that all they have to do is create a digital wallet.
"We need to create an environment of hostility towards the criminal elements".
While many countries are adopting cryptocurrency regulation and are developing policies that will facilitate more authoritarian control over portfolios, exchanges and even taxes, there are many nations that actively ignore these issues.
This, says Carlisle – currently Head of Community at the Elliptic Cryptocurrency Intelligence Agency – is leaving the door wide open to crime.
He said: "I think one of the most significant problems we observe is that criminals try to exploit those parts of the world that do not regulate cryptocurrency.
"We see that criminals use services in jurisdictions where they can operate without any observation.
"There is a tangible advantage for regulation if it can promote transparency and create a level playing field with which everyone can operate safely".
Contrary to the opinion of the Norwegian police, however, Mr. Carlisle suggests that the way to trap criminals in the Hagen case would be to allow the transaction to pass.
The request by the money-questioning gang Monero for privacy could still be their downfall.
He added: "One of the problems we encounter is that criminals have to exchange their Monero with bitcoins before changing them back to fiat (standard currency).
"The point where they convert Monero into bitcoin is where we start to see the paper trail for our investigations – that's how we can track down the bad guys."
Coin Rivet is a website that offers news, information, analysis, opinions and insights from the rapidly changing world of blockchain.
