The Dangers of Bitcoin Trapping

A place where an illegal transaction happens, such as a drug deal has come to be known as “the trap spot”. In those moments when both parties meet anyone can run up on the participants and cause pandemonium to erupt. Due to the untrustworthy dealings of Coinbase and Bitstamp, the best method for acquiring Bitcoin is through old fashioned OTC trade. However speculation of the dangers of trapping has become reality for unlucky individuals in New York City. The Observer reported a crime wave in which victims have been robbed at gunpoint for their coins.

One victim, Dwayne Richards, a New York fire fighter, was recently mugged and stabbed by delinquents using the ruse of meeting for an exchange of Bitcoin for cash. The thieves who pretended to be legitimate buyers were after Richards' coins. He has refused to comment to the press and it is currently unknown whether the thieves pilfered any coins.

Another victim of a mugging is Dean Katz, who trades coins in person for cash around the streets of New York, similar to a drug dealer working a corner. He operates on call from his listings, and meets the individual on the street to make the exchange, an identical process to trapping.

Katz told The Observer about a particular one caller:

He called because he wanted to gamble during the Super Bowl, which is pretty common.

When the individual arrived at the trap spot, he threatened Mr. Katz at gunpoint, taking $3,500 in cash, and forcing Mr. Katz to transfer approximately 30 BTC ( $8,500 USD) to the robber.

The overbearing regulatory climate in the US for exchanging fiat for Bitcoin seems to have similar consequences as its War on Drugs.

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