‘Wrench attacks’ against crypto holders are on the rise. What to know
Global News
Some of crypto’s key characteristics help explain why wealthy individuals who hold a lot of digital assets can be ripe targets for such attacks.
The headline-grabbing tale of an Italian man who said he was kidnapped and tortured for weeks inside an upscale Manhattan townhouse by captors seeking his bitcoin highlights a dark corner of the cryptocurrency world: the threat of violence by thieves seeking digital assets.
The alleged attempted robbery is known as a “wrench attack.” It’s a name popularized by an online comic that mocked how easily high-tech security can be undone by hitting someone with a wrench until they give up passwords.
Wrench attacks are on the rise thanks in part to cryptocurrency’s move into mainstream finance, Phil Ariss of the crypto tracing firm TRM Labs said in a recent blog post.
“Criminal groups already comfortable with using violence to achieve their goals were always likely to migrate to crypto,” Ariss said.
Some of crypto’s key characteristics help explain why wealthy individuals who hold a lot of digital assets can be ripe targets for such attacks.
Cryptocurrencies like bitcoin offer traders full control of their funds without the need for a bank or permission from a government to buy, sell or hold it. The trade-off is that if funds are lost or stolen, there can be no way to get them back.
Self-reliance is a key ethos of crypto. Securing and controlling one’s private keys, which are like passwords used to access one’s crypto holdings, is viewed as sacrosanct among many in the crypto community. A popular motto is “not your keys, not your coins.”
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.
