An intriguing story about an Italian guy who claimed to have been abducted and subjected to weeks of torture inside a posh Manhattan townhouse by captors vying for his bitcoin brings to light a negative aspect of the cryptocurrency industry: the risk of violence from criminals pursuing digital assets.
“Wrench attack” is the term used to describe the purported robbery attempt. Its moniker was made popular by an internet comic that made fun of how simple it is to break high-tech security by striking someone with a wrench until they divulge their passwords.
Phil Ariss of the crypto tracking company TRM Labs stated that the spread of cryptocurrencies into mainstream finance is contributing to an increase in wrench attacks.
Criminal organizations who were already at ease with employing violence to accomplish their objectives were always likely to switch to cryptocurrency, according to Ariss.
A few of the main features of cryptocurrency serve to explain why affluent people who own several digital assets may be prime candidates for these kinds of attacks.
The draw
With the use of cryptocurrencies like bitcoin, traders can purchase, sell, and hold the funds without a bank or government approval. The drawback is that there is no way to recover money that has been misplaced or stolen.
One important aspect of crypto is self-reliance. Many in the crypto community consider it essential to protect and manage one’s private keys, which are similar to passwords and are used to access one’s cryptocurrency assets. The saying “not your keys, not your coins” is a common one.
The blockchain, which is the technology behind cryptocurrencies, records transactions indefinitely. Additionally, thieves don’t need to carry stolen cryptocurrency around like they would cash, jewels, gold, or other valuables. Transferring enormous sums of money from one address to another only takes a few clicks.
Crypto thefts
Cryptocurrency theft is nearly as old as the cryptocurrency itself, however it is typically accomplished through hacking. Cryptocurrency worth billions of dollars is thought to have been stolen in recent years by North Korean state hackers alone.
Because of the risk of hacking, those who own a lot of cryptocurrency frequently prefer to keep their private keys offline and in “cold wallets.” When used appropriately, these wallets can outwit even the most skilled and dedicated hackers.
They are powerless against thieves who coerce victims into divulging their passwords in order to access their wallets and transfer funds, however.
One of several high-profile wrench attacks, the New York case is the most recent. There have been other incidents in France where robbers cut off a crypto executive’s finger.
Mitigation
Experts recommend a number of strategies to lessen the risk of wrench attacks, such as utilizing wallets that demand several approvals prior to any transactions.
Trying to remain anonymous is arguably the most popular strategy used by crypto-wealthy people to thwart wrench assaults. In the cryptocurrency ecosystem, even top executives at well-known companies frequently use nicknames and cartoon avatars on their social media sites.
