With the high price of Bitcoin, are Sask. criminals cashing in?

Do crimes involving the cryptocurrency Bitcoin transpire in Saskatchewan?

The answer — not as technologically sophisticated as the digital coin might suggest.

One of the most recent was a smash-and-grab job reported to the Prince Albert Police Service. It was reported that two male suspects were responsible for the break-in and theft in the 1400 block of Central Avenue.

Upon further investigation, officers noted a Bitcoin machine had been pried open and the contents were stolen.

“Our HoneyBadger Bitcoin ATM at Gateway Mall in Prince Albert was compromised and as a result, a small amount of cash was stolen and the machine was damaged,” read a statement provided by HoneyBadger CEO Rob Spurgeon.

“HoneyBadger has been operating in Saskatchewan since 2017, and we have successfully helped customers buy and sell Bitcoin at 13 locations across the province with no previous thefts.

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Dr. Natalia Stakhanova, an associate professor at the University of Saskatchewan (USask) Department of Computer Science and Canada research chair in cybersecurity, explained what Bitcoin ATMs are and how people use them.

“Believe it or not, it’s just like a regular ATM … with a slight difference,” she said.

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“It’s very similar in the sense that you would also need to bring your cash and through a transaction … you could actually buy a Bitcoin so you wouldn’t get necessarily anything back or nothing tangible at least but you will get a confirmation that you actually bought a Bitcoin.

“The money that you’re using, the physical money, will buy the corresponding amount of Bitcoins and that amount is going to be virtually transferred to your wallet, to your virtual wallet … so there is nothing physical to carry out of that ATM except the money, the cash money that somebody would put in.”

Spurgeon told Global News no customers were impacted by the theft and no data was compromised as it is not stored in HoneyBadger’s kiosks. He added it was an older ATM that has now been upgraded with a new model that has increased security features.

As of noon on Friday, one Bitcoin had a price of roughly $60,000.

“If somebody would be buying a few Bitcoins, then they would need to put at least several thousand into the ATM to get it out. So I think that’s the primary value in actually going after Bitcoin ATM, just the cash itself,” Stakhanova said.

“This is the first (theft involving a Bitcoin ATM) in Saskatchewan, I believe, although I haven’t seen RCMP records, I haven’t heard of this type of event in Saskatchewan.”

After some digging, Saskatchewan RCMP spokesperson Jessica Murphy said they could only find one other occasion involving a Bitcoin ATM from 2019 and 2020.

“The story was the victim’s wife, the victim’s partner, contacted us and shared these details, letting us know that they’re being scammed and that they were being requested to deposit to a Bitcoin ATM … We were able to prevent the victim from actually making that deposit,” Murphy said.

“To our understanding, we haven’t had a report of that this year … in 2019 we were made aware of 31 files involving Bitcoin in the police reports here. So of those 31 files, there are only 10 where someone actually lost money.

“In 2020, we were made aware of 58 files and then of that, 26 were victims who lost money.”

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Murphy said most of the reports involve scams or fraud.

“These vary between the victims receiving … threatening emails that if they don’t send Bitcoins or some fake (Canada Revenue Agency), RCMP and Service Canada calls requesting Bitcoin transfers,” she said.

“The other types of files … are typically emails threatening either to release embarrassing photos or if they don’t send Bitcoins or other scenarios we’ve seen involved people starting a job with a new company and the company allegedly gives them money for a startup and then asks the victim to transfer it back via Bitcoin.”

In order to protect against these attacks, the USask cybersecurity expert advised education and awareness.

“The typical phishing and typical scamming abuses of a Bitcoin completely rely on the human factor, just like with falling victim over a regular phishing attack and we blame it on our own, maybe lack of awareness or lack of understanding,” Stakhanova said.

“It’s really difficult to fix because, essentially, it requires educating people. And if you came to the point that you can create your own Bitcoin wallet and exchange transaction, Bitcoin transaction, you certainly have some experience and some basic knowledge but that’s certainly not sufficient to cover up the security side.

“Bitcoin itself is based on the very strong cryptographic algorithms that themselves, from the mathematical perspective, are hard to break.”