"Billions at Stake with a Click"... What Is a 'Wrench Attack' Targeting Cryptocurrency Wealth?

Crimes Targeting Wealthy Cryptocurrency Holders on the Rise
Irreversible Loss Even After Forced Seizure

Physical violence targeting wealthy cryptocurrency (virtual asset) holders is on the rise overseas. These crimes are committed to forcibly obtain the passwords to cryptocurrency wallets. Experts point out that cryptocurrencies are particularly vulnerable because, once stolen, they cannot be recovered.

Bitcoin. Pixabay

According to the Associated Press on May 29 (local time), a recent incident involved an Italian man who was held captive and tortured for about 17 days in a luxury townhouse in Manhattan, New York. The perpetrators reportedly subjected the victim to severe abuse, including physical assault and drugging, with the goal of obtaining the password to his Bitcoin wallet.

This type of physical violence used to steal cryptocurrency is known as a "wrench attack." The term, which originated from an online comic, became a meme to satirize the idea that, no matter how advanced your security technology is, it is useless if someone beats you with a monkey wrench to get your password.

However, as crimes targeting cryptocurrency holders have increased recently, what was once considered a mere joke has become a real threat. Previously, most cryptocurrency-related crimes involved digital attacks such as hacking, but now there are also cases involving actual physical violence.

Phil Annis, a cryptocurrency tracking expert at TRM Labs, stated in a recent blog post that wrench attacks are increasing as cryptocurrencies enter the mainstream financial market. He pointed out, "Criminal organizations accustomed to using violence are highly likely to eventually move into cryptocurrencies."

Because cryptocurrencies give holders full control over their assets, they are inherently vulnerable to wrench attacks. Cryptocurrencies like Bitcoin are designed to allow anyone to freely own and transfer assets without the involvement of banks or governments. However, if assets are stolen or forcibly taken, there is virtually no way to recover them. While vast amounts of wealth can be transferred with just a few clicks, once stolen, there is no way to reverse the transaction.

The Associated Press reported, "'Self-custody' is a core value of cryptocurrency assets," adding, "Users must store and manage the private keys needed to access their wallets themselves, and there is a saying: 'Not your keys, not your coins.'"

Experts recommend using cryptocurrency wallets that require multiple levels of approval to execute transactions as a way to prevent wrench attacks.