A New York City firefighter, Dwayne Richards, was reportedly stabbed and robbed of bitcoins. He survived the incident and is recovering.
Richards had arranged to meet a party interested in purchasing bitcoins, in person, in Williamsburg. Police are looking into the incident, but due to Bitcoin’s decentralized structure, it is unlikely that the bitcoins will be recovered.
There are some advantages of making in-person bitcoin trades. One does not have to go through what can be a lengthy setup process on an online bitcoin exchange, which may include verification steps and wire transfers. In addition, doing the transfer in person is similar to dealing in traditional p2p cash, avoiding the need for a trusted third party.
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However, such encounters can be risky, as bitcoin’s anonymity can attract parties not with the purest of motives.
Several weeks ago, David Katz, a dealer that travelled around New York buying and selling bitcoins, was to meet an individual who wanted to gamble during the SuperBowl. Meeting at a “secure” location in Queens, Katz was threatened at gunpoint and forced to transfer $8,500 in bitcoins and $3,500 cash.
Katz reported the incident to police and has since heard from other people of similar incidents. Some cases were physical robberies, while in others the issue was counterfeit money.