Ex-Engineer Sentenced to Nearly 3 Years for $750K Cryptocurrency Extortion Plot

Key Points

• Daniel Rhyne, a 59-year-old from Kansas City, Missouri, received a 32-month federal prison sentence.
• Rhyne served as a core infrastructure engineer for an industrial firm located in New Jersey.
• In November 2023, he executed scheduled tasks designed to erase administrative accounts, alter passwords, and disable servers.
• His ransom demand totaled approximately 20 bitcoin, valued at around $750,000 at that time.
• On September 28, 2026, Judge Michael A. Shipp handed down the sentence at the Trenton federal courthouse.

An IT professional who orchestrated a cyberattack against his employer’s computer infrastructure has been sentenced to federal prison after attempting to extort cryptocurrency from the company.

Daniel Rhyne, age 59 and currently residing in Kansas City, Missouri, was sentenced to serve 32 months behind bars. On October 5, 2026, U.S. Attorney Robert Frazer from the District of New Jersey revealed the sentencing details.

Rhyne had entered a guilty plea to a two-count Information document. The charges included extortion involving threats to damage a protected computer system and intentional destruction of a protected computer.

The Mechanics of the Cryptocurrency Blackmail Operation

As a core infrastructure engineer, Rhyne held a technical position at an industrial corporation with headquarters in New Jersey. Legal documents identify this organization as Victim-1, though authorities have not disclosed its actual name. Rhyne was based in New Jersey during his employment.

Starting in November 2023, Rhyne initiated his scheme to compromise the company’s digital infrastructure. Court records indicate he established unauthorized remote desktop connections to company systems.

Following this unauthorized access, he created scheduled automated tasks intended to inflict significant harm on the network. His malicious activities included programming the deletion of network administrator accounts and resetting credentials for additional company user accounts.

These scheduled operations were also configured to force shutdowns of multiple company servers. All of these actions formed the foundation of his coordinated assault.

On November 25, 2023, Rhyne transmitted an electronic message to company personnel. The communication contained threats to continue disabling the organization’s servers unless his financial demands were satisfied.

His extortion demand specified approximately 20 bitcoin. Based on market values at that moment, this cryptocurrency amount equated to roughly $750,000, translating to about $37,500 for each bitcoin. The official announcement did not indicate whether the company complied with the ransom demand.

Court Proceedings and Federal Sentencing

Rhyne submitted his guilty plea in the courtroom of U.S. District Judge Michael A. Shipp. Judge Shipp presided over both the plea agreement and the subsequent sentencing hearing.

The 32-month incarceration term was delivered by Judge Shipp on September 28, 2026. Proceedings occurred at the federal courthouse in Trenton, New Jersey.

Prosecution was handled by the U.S. Attorney’s Office representing the District of New Jersey. Rhyne’s current address is in Kansas City, Missouri.

Special agents from the FBI’s Newark Field Office conducted the investigation. Stefanie Roddy serves as the director of that office.

Frazer expressed appreciation to the FBI’s Kansas City Field Office for providing investigative assistance. Special Agent in Charge Chris Ormerod leads that division.

The official announcement came on October 5, 2026, seven days following the Trenton courtroom proceedings. Rhyne will spend 32 months in federal custody for orchestrating the network intrusion and cryptocurrency extortion attempt.