In 2025, a shocking revelation emerged from Uganda’s National Identification and Registration Authority (NIRA) as an employee confessed to orchestrating a high-profile cryptocurrency theft. The incident, which has raised alarms about systemic corruption and security vulnerabilities, involved the abduction of Festo Ivaibi, a renowned blockchain educator and founder of Mitroplus Labs. This brazen scheme, blending insider knowledge with military involvement, reportedly netted criminals around $500,000 in various digital assets.
The abduction occurred in May 2025, when Ivaibi was forcibly taken near his home in Kampala by individuals impersonating soldiers. These assailants, allegedly recruited from the Uganda People’s Defence Forces (UPDF), compelled Ivaibi to transfer significant amounts of cryptocurrency under duress. A NIRA employee, whose identity remains undisclosed pending trial, is believed to have collaborated with Batambuze Isaac, a cryptocurrency broker, to execute this elaborate scheme.
Investigative reports from Bitcoin.com News indicate that the NIRA insider’s access to sensitive personal data was crucial in tracking Ivaibi’s movements. This access allowed the conspirators to exploit Ivaibi’s status as a crypto entrepreneur, leading to a calculated ambush. The assailants blindfolded Ivaibi and forced him to make transfers from multiple wallets, culminating in the substantial theft. This incident highlights a disturbing rise in “crypto kidnappings,” a trend previously noted in regions such as the U.S. and now emerging in Africa, as documented by Crystal Intelligence.
As the Ugandan authorities intensified their investigation, they utilized blockchain forensics to trace the stolen funds, leading to a swift series of arrests. The NIRA staff member confessed to providing support, including forged documents that legitimized the actions of the impostors. The incident has sparked outrage on social media platforms like X, with users expressing concerns over the alleged involvement of UPDF personnel. However, official statements from the Uganda Police Force emphasized that the soldiers acted independently and not under direct orders.
This case exposes significant vulnerabilities not only in the crypto sector but also within Uganda’s national security framework. Mitroplus Labs has publicly condemned the incident, claiming it is part of a larger pattern, with at least 48 similar abductions occurring in Uganda—seven allegedly linked to the same group, as reported by Africa Bitcoin News. The ordeal faced by Ivaibi included torture, prompting calls for international scrutiny from organizations like Binance, which has been instrumental in tracing the stolen funds.
Despite a burgeoning crypto scene in Uganda, government efforts to regulate digital assets, including a ban on unlicensed exchanges implemented in 2022, have not effectively curbed illicit activities. Observers have noted a growing sentiment that while blockchain technology enhances traceability, it can also attract criminal elements looking to exploit weaknesses in the system.
As the trial approaches, experts advocate for enhanced security measures within the crypto industry, such as the use of hardware wallets and anonymous trading protocols to protect users. Ivaibi has vowed to continue his educational efforts, transforming his traumatic experience into advocacy for safer digital finance. However, the exposure of rogue elements has raised pressing questions about trust in institutions where corruption and technology intersect, calling for stakeholders worldwide to reinforce defenses against these evolving threats.
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