First-ever ransom in bitcoins secures release of kidnapped executive

An employee of a UK-based bitcoin exchange, who had been kidnapped has been released after a ransom of $1 million was paid.

According to Russian and Ukrainian media reports, Pavel Lerner, a 40-year-old Russian citizen and head of the UK-registered cryptocurrency exchange Exmo Finance, was kidnapped on Tuesday and dragged into a black Mercedes-Benz by men in balaclavas.

Lerner is an expert on blockchain, the technology which powers bitcoin. The technology allows digital information to be shared without being copied. According to one source who spoke to the Financial Times, Lerner had paid $1 million in bitcoin to secure his release and his abduction may be one of the first rare cases of kidnapping and extortion for cryptocurrency.

In a statement released yesterday, Exmo confirmed that Lerner had been located and released.

''At the moment, he is safe, and there was no physical harm inflicted on him. Nevertheless, Pavel is currently in a state of major stress, therefore, he will not provide any official comments in the coming days,'' the company said.

''We would like to note that the story of Pavel's abduction has overgrown with rumors that might tamper with the official investigation. That said, EXMO currently refrains from any comments or suggestions of own versions of the possible scenario, in the nearest future.''

''He was kidnapped by an armed gang for the purpose of extorting bitcoins,'' Ukranian interior ministry adviser Anton Gerashchenko told the Financial Times.''... We have operative information that he paid more than $1m worth of bitcoins.''

According to Gerashchenko, Lerner was ''released in a state of shock'' and ''very lucky that he remained alive.''

However, Exmo maintains that all customer data is safe and had earlier told the BBC that Lerner's job did not include ''access either to storages or any personal data of users.''