Latest news with #wrenchattacks
Crypto Insight
27-07-2025
- Business
- Crypto Insight
Wrench attacks drive crypto investors to centralized custodians
Crypto custodians are reporting increased interest in their services amid the rising frequency of so-called '$5 wrench attacks' on cryptocurrency traders, investors and project leaders. In the last year, several high-profile wrench attacks — physical attempts to steal someone's crypto — have targeted prominent investors and business executives in the blockchain industry. The crypto mantra of 'not your keys, not your coins' has lost its power among some investors who fear for their personal safety. Cold wallets may offer full control over digital assets, but they also present a single point of attack. As crypto adoption grows, and wrench attacks persist with the proliferation of more high-value crypto investors, custodians are seeing a shift in preference from self-custody to institutional control. Crypto wrench attacks drive security demand Wrench attacks are nothing new. Jameson Lopp, a Bitcoin advocate and chief technology officer of Bitcoin wallet Casa, published a GitHub repository logging hundreds of such incidents since 2014 — and those were only the ones reported in the news. In the last two to three years, as crypto adoption has sped up and become more mainstream than ever, attacks have grown more public and sophisticated. In January 2025, the founder of crypto wallet Ledger and his wife, David and Amandine Balland, were kidnapped, taken to separate locations and held at ransom. Just months later, the daughter of an exchange founder barely fought off attackers who attempted to kidnap her in a van on the streets of Paris. Concern over the rise in attacks and their similar methods led French Interior Minister Bruno Retailleau to meet with cryptocurrency professionals to discuss the issue. As concern over these attacks grows, crypto custodians are noticing an uptick in interest in their services. Emma Shi, over-the-counter and institutional sales director of HashKey, which offers custody and exchange services, told Cointelegraph, 'We're absolutely seeing rising retail anxiety translate into meaningful inflows. Wealthier retail investors are increasingly approaching regulated custodians after high-profile cases like the recent Manhattan kidnapping, where physical coercion was used to access private keys.' Shi said HashKey's custody business has noted increased interest in storage from 'family offices, crypto-native high-net-worth individuals and even those with nest eggs that are large enough to be vulnerable to theft.' Cold wallets have long been lauded by crypto advocates as a way to give investors full control over their assets and to keep them maximally secure offline. However, this single key also provides a 'single point of failure,' per Wade Wang, CEO of multiparty computation (MPC) crypto custody service Safeheron. Wang said that there is a 'flight to security' among crypto investors, where holders 'are actively seeking innovative solutions that eliminate that single point of failure to significantly raise the bar for attacking.' Already in 2023, a report from PricewaterhouseCoopers on the state of digital custody noted the challenge of cold wallets being prone to theft or loss. One solution posited in the report was MPC or multisignature wallet options. Can custody services stop wrench attacks? Crypto self-custody, while boasting a new technology, runs into the same problem as treasure hoarders throughout history — they were vulnerable to physical attacks and theft until they could share that risk with a stronger and securer institution like a bank. Robbing a bank is a lot harder than robbing a person. In the same fashion, crypto investors are now seeking to 'raise the cost' of the $5 wrench attack. Wang said that investors wish to 'return to the fundamental principle: making the cost for an attacker rise exponentially. For example, when it costs $3 million to steal $10 million, the incentive for attack is lost.' Third-party custody can achieve this and mitigate the problem of wrench attacks, adding time-locks and layers of approval and shifting the target from an individual to the custodian's employees. 'But it is not an optimal solution,' per Wang. Trust is still put in a single, centralized institution and, as exemplified by the recent breaches at Coinbase and Bybit, even major regulated crypto businesses are vulnerable to employee misconduct and phishing. Wang suggested that distributed custody, such as MPC, 'is a superior solution because it fundamentally solves the problem. The core principle of MPC is to use technology to decentralize the single point of control and risk […] into a 'multiparty' structure.' In such a system, control doesn't belong to any one person, and transferring funds requires complex consensus protocols from multiple parties. Decentralized solutions may better reflect the ethos of the blockchain industry, but 'we cannot neglect the benefits of centralized custodians,' Wang said. 'Reliable security measures bring better assurance of keeping clients' assets safe, a familiar way of doing things for lots of new crypto players.' Centralized or decentralized, crypto investors could still be at risk if the public image of crypto investors is that they are all walking around with cold wallets full of Bitcoin. Shi said, 'The perception of risk matters, too. Attackers often assume holders store funds themselves, so public awareness that more crypto is held in custodial solutions may deter opportunistic assaults.' Wrench attacks a 'temporary problem' solved by adoption Public perception is indeed changing. Retail investors are increasingly making crypto part of their portfolio, according to a 2024 report from Ernst & Young. New regulations in large financial markets like the EU and the US are creating the frameworks necessary for institutional investors to get involved. This regulatory shift has been good for the custody industry as well, as it 'legitimizes professional custody for everyday investors and is leading to more offerings from not only crypto-native firms but traditional banks as well,' said Shi. 'We're seeing crypto adoption accelerate in regions with regulatory clarity, which creates entirely new custody considerations for investors who previously relied solely on self-custody solutions.' Regulations also raise the stakes of wrench attacks, per Wang. Better regulatory frameworks with more jurisdictions 'proactively setting robust regulations' will 'inevitably lead to more severe law enforcement actions, which will significantly increase the cost of such attacks and fundamentally curb such behaviors.' 'We see the physical attacking as a temporary challenge,' Wang concluded. The crypto industry has evolved through many stages, but the rise of wrench attacks on prominent investors and executives shows that it has yet to reach the maturity of traditional financial markets. In the meantime, executives are not only moving their assets to centralized and decentralized custodians but also finding muscle of their own. Personal security firms have also seen an uptick in interest from crypto's elite to protect their homes and persons. Source:
Yahoo
24-06-2025
- Business
- Yahoo
Crypto Kidnappings Are on the Rise. Should Investors Be Worried?
Increasing numbers of crypto investors have been victims of kidnapping, wrench attacks, and home invasions. Thieves are using social media to profile potential crypto targets. Don't let criminals change your investment strategy, but do take precautions. 10 stocks we like better than Bitcoin › Crypto kidnappings and so-called wrench attacks have been in the news recently. In one high-profile case, kidnappers in France abducted Ledger co-founder David Balland and his wife and demanded a significant crypto ransom for their release. Closer to home, criminals allegedly held and tortured an Italian entrepreneur for 17 days in a Manhattan apartment. Sadly, it isn't a new phenomenon. Last year, a Florida resident was sentenced to 47 years for a series of crypto-related home invasions that started in 2022. However, these crimes are on the rise. And the Coinbase data breach that revealed the home addresses of over 69,000 customers does not help investors feel safe. According to Bloomberg, there have been 23 attacks on crypto holders this year, up from just six in the same period last year. The name "wrench attacks" comes from a comic strip that suggested complex encryption wouldn't help against criminals who drugged and beat their victims to get their passwords. Bitcoin (CRYPTO: BTC) has soared to record highs this year. Not only are digital currencies becoming more valuable, but they're also more mainstream. TRM Labs Director Phil Ariss says that makes it more attractive to criminals, including violent ones. "As long as there's a viable route to launder or liquidate stolen assets, it makes little difference to the offender whether the target is a high-value watch or a crypto wallet," he said. TRM Labs specializes in analyzing blockchain data to fight fraud and financial crime. One key reason for the rise in attacks on cryptocurrency holders is that the criminals think crypto transactions are both anonymous and irreversible. The transfer takes place instantly. And, unlike a bank transaction, if someone hands over their crypto keys under duress, there's a perception that transfers can't be traced. That's not actually entirely correct. Authorities are getting better at tracking and prosecuting these types of illicit transactions. Sadly, that message hasn't gotten through to the thieves. Another crypto-specific risk is that potential attackers can use peer-to-peer (P2P) transactions to identify crypto holders. The nature of P2P trading means that individuals talk directly to one another, which can expose their personal information. Finally, the thieves target people who post about their crypto gains. From influencers to key players in the industry, bad actors glean information online. Take, for example, the Taihuttu family, who have travelled the world using only Bitcoin since 2017. Recently, strangers told them they'd used YouTube videos to work out where they were staying, so the family stopped posting. Although home jackings aren't unique to crypto, there are elements of digital currencies that can amplify the risks. For some, one of the attractions of crypto is that you can become your own bank. But if you go that route and store your assets in a non-custodial crypto wallet, you are responsible for security. The idea that your investment decisions could make you a target for criminals is certainly unnerving. But don't let dramatic headlines put you off investing in Bitcoin or any other crypto. There are many reasons you might put a small percentage of your portfolio into cryptocurrency, including a desire to hedge against economic uncertainty. However, cryptocurrency doesn't always work in the same way as stocks or money in the bank. Even with increased adoption, it is still a relatively new asset class, and it doesn't have the same investor protections. If you buy crypto, think about how to store it safely. Here are some steps you can take: Buy crypto through an exchange-traded fund (ETF): If you invest in crypto through an ETF, it is the fund -- not you -- that needs to safeguard the assets. The Securities and Exchange Commission (SEC) has already approved spot ETFs for Bitcoin and Ethereum (CRYPTO: ETH) and looks likely to greenlight others shortly. Be careful what you post on social media: Criminals are using social media to build profiles of potential targets. If you've built a profitable crypto portfolio (or from any other investments), try not to share that information online. Make a plan to store your crypto: If you use a non-custodial hardware wallet, consider storing it in a bank safety deposit box. Most crypto wallet companies offer additional security features, so find out what's available. For example, a multisignature wallet requires several keys to authorize transactions. There are also tools that split your seed phrase into several parts and ways to set up fake dummy wallets. Depending on the size of your crypto holdings, you might consider crypto insurance. An increasing number of insurance companies now offer specific packages for Bitcoin holders. Look for policies that specifically protect against wrench attacks. Cryptocurrency investing is still a new frontier. If you buy into a crypto ETF through a brokerage account, the fund takes care of the custody and security. However, if you buy through an exchange, think carefully about how you will store your assets to minimize both cyber and physical risks. Before you buy stock in Bitcoin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Bitcoin wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Emma Newbery has positions in Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy. Crypto Kidnappings Are on the Rise. Should Investors Be Worried? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CBS News
30-05-2025
- Business
- CBS News
Crypto kidnappings on the rise as criminals resort to "wrench attacks"
The recent case of an Italian tourist who was kidnapped in New York City and tortured by people allegedly after his cryptocurrency is drawing attention to a rash of crimes dubbed "wrench attacks," which combine cybertheft with old-fashioned thuggery. The term stems from an XKCD comic that depicts a "crypto nerd's imagination" of the tech know-how that would be required to break into their digital wallet. In reality, the comic notes, all it would take is a heavy $5 wrench to threaten the crypto owner until they revealed their account password. Such attacks have picked up in recent months, partly because stealing a digital wallet can be easier than stealing money from a traditional bank account, said Ari Redbord, global head of policy and government affairs at TRM Labs, a crypto tracing firm. On top of that, the value of bitcoin has surged in recent months, making people with crypto holdings potentially lucrative targets for criminals. "Criminals go to where the money is, and we're seeing a huge rise in the price of bitcoin," Redbord said. "Before, you needed sophisticated cyber capabilities to hack someone, but now you can be a violent criminal who can beat [the password] out of someone." He added, "I don't think I've ever been as taken aback by this type of illicit activity in crypto." The crypto world also has a culture of flaunting wealth via social media posts or appearances at crypto conference, which allows criminals to easily identify potential targets. Bitcoin traded Friday at nearly $105,000 per token, according to CoinDesk — about 53% higher than a year ago. The digital currency has soared partly as people seek alternatives to put their money than traditional investments like stocks and bonds, and as the Trump administration takes steps to promote the use of cryptocurrencies, including establishing a "strategic crypto reserve." How to crack a wallet Cryptocurrency thefts aren't new, but they've typically involved hacking, such as a massive 2022 hack at crypto exchange Binance in which thieves initially stole $570 million, as well as multiple hacks by entities the United Nations found were linked to North Korea. In response to such threats, crypto owners often try and keep their private keys off the internet and stored in what are called "cold wallets." When used properly, such wallets can defeat even the most sophisticated and determined hackers. But criminals have realized they don't need any technical skills to steal crypto assets, Redbord said. All it takes is gaining access to a person's crypto account password, because there's no third-party financial institution standing in the way of accessing funds held in a digital wallet, he explained. Transactions on the blockchain, the technology that powers cryptocurrencies, are permanent. And unlike cash, jewelry, gold or other items of value, thieves don't need to carry around stolen crypto. With a few clicks, huge amounts of wealth can be transferred from one address to another. NYC crypto kidnapping The case in New York City is somewhat unusual because it involves crypto investors allegedly trying to steal the assets of another investor, Redbord said. In that case, investors John Woeltz, 37, and William Duplessie, 33, face charges of kidnapping, assault and unlawful imprisonment of the Italian tourist in an effort to steal his digital wallet containing bitcoin worth millions of dollars. Court papers allege that the pair held the unidentified 28-year-old victim for weeks in an apartment in New York City's fashionable Soho neighborhood. After the victim was abducted, he was shocked with electric wires, his leg was cut with a saw and he was forced to smoke crack cocaine, prosecutors allege. Items including a photo of a gun held to the Italian tourist's head were found in the apartment by investigators. Two New York City police detectives had been working security for the accused kidnappers, CBS News New York has reported. The detective have been placed on desk duty as police investigate. William Duplessie, who along with John Woeltz is accused of kidnapping an Italian tourist to steal his cryptocurrency holdings, is escorted out of the New York Police 13th Precinct after turning himself in on charges of kidnapping and false imprisonment, Tuesday, May 27, 2025, in New York. Yuki Iwamura / AP Such incidents have also occurred with increasing frequency in Europe and Asia. Several cases in France have mirrored the New York City attack, with French police arresting 20 people following several alleged kidnapping plots involving crypto investors and their families, the BBC reported earlier this week. In one case, a gang allegedly tried to kidnap the daughter and young grandson of a cryptocurrency company executive in Paris, while earlier this month the father of a crypto millionaire was rescued by police in Paris after he was kidnapped and held for ransom. Aside from keeping a lower profile, crypto investors can take other steps to make it tougher for criminals, Redbord said. One option is to require permissions from several people to access a wallet, for instance. In the meantime, criminals are taking note and may be pursuing similar crimes, he added. "They are seeing successes and trying to replicate these successes," Redbord said. contributed to this report.
