Crypto Founder Kidnapped in Uganda, Forced to Transfer $500K in Digital Assets at Gunpoint

In a disturbing escalation of crypto-related crime, Festo Ivaibi — founder of the blockchain education platform Mitroplus Labs — was abducted at gunpoint in Kampala, Uganda, and coerced into transferring $500,000 in cryptocurrency to his captors.

The incident occurred on 17 May near his residence on Bunamwaya Road.

According to a formal statement from Mitroplus’s Afro Token Project, the assailants were reportedly armed, dressed in military-style uniforms, and claimed affiliation with the Uganda People's Defence Forces (UPDF).

Under duress, Ivaibi was forced to unlock digital wallets and initiate the transfer.

Mitroplus Labs also alleges that a portion of its native meme coin, Afro Token, was sold off during the ordeal.

The case marks the latest in a troubling rise of crypto-related abductions and extortion schemes worldwide.

The project said:

“What happened to our founder was not just an attack on one man, it was an attack on innovation, on education, and on the future of Africa’s digital economy.”

Two Chinese Suspects Linked to Crypto-Related Assault

In the aftermath of the abduction, Uganda’s revenue authority reportedly granted Ivaibi access to its police command center, enabling him to review street surveillance footage to assist the investigation.

Ivaibi noted:

“Police have dismissed these cases, citing unregulated cryptocurrency and individual risk. However, as Mitroplus Labs, we’ve engaged with the Uganda Revenue Authority (URA) on crypto taxation and participated in knowledge-sharing sessions on blockchain, AI, and cryptocurrencies. I’m registered as a cryptocurrency trader with the Revenue Authority, have filed tax returns, and faced penalties for late filings.”

Mitroplus Labs characterised the attack as part of a broader, coordinated scheme involving individuals posing as crypto traders, law enforcement officials, and, notably, two Chinese nationals.

The company claims to have identified at least 48 similar incidents in Uganda—many of which, it says, have been dismissed or inadequately investigated.

Afro Token Dips After Attack

A portion of the stolen funds originated from Afro Token—a meme coin launched by Mitroplus Labs on the Tron blockchain via the SunPump platform.

According to the company, the attackers liquidated some of the tokens during the incident, briefly depressing the token’s price.

However, Mitroplus Labs emphasized that no community-held funds were compromised.

Additional stolen assets were reportedly funnelled into a Binance wallet.

On-chain data reveals that Afro Token has declined approximately 16.7% since the day of the attack, with a further 1.24% drop in the past 24 hours.

Its market capitalisation now stands at around $1.6 million, down sharply from a peak of over $7.3 million in December 2024.

Wrench Attacks Surge as Crypto Holders Targeted Worldwide

These so-called “wrench attacks”—where victims are physically coerced into giving up private keys or authorising crypto transactions—have become alarmingly frequent.

Notable cases include the brutal abduction of Ledger co-founder David Balland earlier this year and a crypto broker who broke both ankles fleeing captors.

Just this month, police rescued the father of a crypto entrepreneur after kidnappers demanded nearly $8 million in digital assets.

Michael Pearl, Vice President of Strategy at blockchain security firm CyVers, explains the unique challenge wrench attacks pose that they rely on physical force to bypass technical safeguards.

He advocates for stronger protective measures, such as multi-factor authentication and transaction monitoring to flag suspicious behaviour.

Even something as simple as a login from an unfamiliar device should trigger alerts or temporary account freezes, according to Pearl.

Yet, the rise of such attacks appears tied to larger systemic issues.

As income inequality deepens and crypto values soar, these crimes are only becoming more attractive, Harry Halpin, CEO of decentralised VPN service Nym, stated.

He also raised concerns over the growing demand for personal identification data in crypto regulation, warning that such information, if leaked, could be weaponised by criminals.

Privacy-preserving tools like VPNs are no longer optional—they are essential, Halpin concluded.