Two computer experts accused of hacking into NIC Bank’s customer database demanded to be paid Sh6.2 million in bitcoins, a form of virtual currency that is traded online and has at times been used by criminals to launder illicit gains.
The two — who Wednesday denied charges of theft, attempted extortion and blackmail — are said to have threatened to publish confidential customer information that they had accessed by hacking into the bank’s systems.
The court heard that on December 18, Alex Mutungi Mutuku and Stanley Kimeu Mutua threatened the bank with exposure if their demands were not met.
“At an unknown place, with intent to extort money, they sent an e-mail to NIC Bank demanding 200 bitcoins, equivalent to Sh6.2 million, knowing that the sent messages would be received while containing threats that were detrimental and meant to cause anxiety and injury to the said NIC Bank,” read the charge sheet.
The value of the bitcoins on January 15 is about Sh3.9 million with one bitcoin trading at just below Sh20,000. At their peak early last year, the bitcoins would have been worth five times as much.
The usage of bitcoins for settling transactions, though recognised in some Western countries such as the US, has attracted the attention of financial sector regulators due to their connection to fraud and money laundering.
Bitcoin users do not have to adhere to strict disclosure requirements that bank customers have to observe when making online transactions.
A second charge of theft stated that on diverse dates between August 2 and 5 at the NIC Bank head office in Nairobi, jointly with others not before court, the suspects stole Sh2.88 million belonging to the bank.
The prosecution said an accomplice, Sylvester Muthoka Kamula, had already been charged and sought to merge the two cases.
The suspects spent two days at the Kilimani Police station as cyber crime investigators cracked encryption codes in their laptops which they had allegedly used to infiltrate the bank’s systems.
They were each released on a cash bail of Sh700,000, with alternatives of depositing Sh1 million bonds with similar sureties.
Updatedon Jan 16 to clarify discrepancy between charge sheet amount and current exchange rate on bitcoins.