The Dark Side of the Blockchain World: "Wrench Attacks" Faced by Encryption Users

Background

In the dark forest of Blockchain, we often discuss various on-chain attacks, smart contract vulnerabilities, and hacking incidents. However, an increasing number of cases are reminding us that threats have spread from the virtual world to real life.

In a recent court hearing, a cryptocurrency billionaire recounted an attempted kidnapping he faced last year. The attackers tracked his movements using GPS, forged passports, and disposable phones, launching their attack from behind as he went upstairs, attempting to suffocate him with a bag and forcibly take control. Fortunately, the billionaire managed to escape by biting off a portion of one attacker's finger.

As the value of encryption assets continues to rise, real-world attacks targeting cryptocurrency users are becoming increasingly frequent. This article will delve into the methods of these attacks, review typical cases, outline the underlying criminal chains, and propose practical prevention and response suggestions.

What is a "Wrench Attack"

The concept of "wrench attack" originates from a webcomic that depicts a scenario where an attacker forces a victim to surrender their password using a $5 wrench instead of advanced technology. This type of attack does not rely on technical means, but rather employs real-world tactics such as threats, extortion, or even kidnapping to compel the victim to hand over their password or assets.

Case Study Review

Since the beginning of this year, kidnapping cases targeting encryption users have been frequent, with victims including core members of project teams, opinion leaders, and even ordinary users.

In early May, French police successfully rescued the father of a kidnapped cryptocurrency tycoon. The kidnappers demanded a ransom of several million euros and brutally severed his fingers to pressure the family.

In January, the co-founder of a hardware wallet company and his wife were attacked at home by armed assailants, who also severed his fingers and filmed the video, demanding a payment of 100 Bitcoins.

In New York, an Italian cryptocurrency investor was lured to a villa and subjected to three weeks of captivity and torture. The criminal gang used chainsaws, electric shock devices, and drugs to carry out threats, even hanging him from the top of a tall building to force him to hand over his wallet private keys.

In mid-May, the daughter and young grandson of a co-founder of a cryptocurrency trading platform were nearly forcibly dragged into a white van on the streets of Paris. Fortunately, bystanders intervened in time to prevent a tragedy.

These cases indicate that compared to on-chain attacks, offline violent threats are more direct, efficient, and have a lower threshold. The attackers are mostly young people, aged between 16 and 23, with basic knowledge of encryption. According to data released by the French prosecution, several minors have already been formally charged for their involvement in such cases.

In addition to the publicly reported cases, the security team also noticed that some users encountered control or coercion from the other party during offline transactions while organizing the information submitted by the victims, resulting in asset damage.

In addition, there are also some "non-violent coercion" incidents that have not escalated to physical violence. For example, attackers threaten victims by掌握受害者的隐私,行踪或其他把柄, forcing them to transfer funds. Although this type of situation does not cause direct harm, it has touched on the boundaries of personal threats, and whether it falls within the scope of "wrench attacks" is still worth further discussion.

It is important to emphasize that the disclosed cases may only be the tip of the iceberg. Many victims choose to remain silent due to concerns about retaliation, law enforcement not taking action, or exposure of their identity, which makes it difficult to accurately assess the true scale of off-chain attacks.

Criminal Chain Analysis

Based on multiple typical cases, we summarize that the crime chain of wrench attacks roughly includes the following key links:

1. Information Locking

Attackers typically begin with on-chain information, combining transaction behavior, tag data, NFT holdings, etc., to preliminarily assess the scale of target assets. At the same time, social media group chats, public statements, interviews with opinion leaders, and even some leaked data also become important auxiliary intelligence sources.

2. Reality positioning and contact

After determining the target's identity, the attacker will try to obtain their real identity information, including residence, frequently visited locations, and family structure. Common methods include:

• Inducing targets to leak information on social platforms
• Use public registration data ( such as ENS bound email and domain registration information ) for reverse lookup.
• Use leaked data for reverse search
• Introducing targets into a controlled environment through tracking or false invitations.

3. Violent threats and extortion

Once the target is controlled, attackers often use violent means to force them to hand over their wallet private keys, mnemonic phrases, and two-factor authentication permissions. Common methods include:

• Physical injuries such as beating, electric shock, and amputation
• Coerce the victim to perform the transfer
• Intimidate relatives and demand family members to transfer funds on their behalf.

4. Money Laundering and Fund Transfer

After obtaining the private key or mnemonic phrase, attackers usually quickly transfer assets using methods including:

• Use mixers to obscure the source of funds
• Transfer to controlled addresses or non-compliant centralized exchange accounts
• Liquidate assets through over-the-counter trading channels or the black market

Some attackers have a background in Blockchain technology, are familiar with on-chain tracking mechanisms, and will deliberately create multi-hop paths or cross-chain obfuscation to evade tracking.

Countermeasures

Using multi-signature wallets or decentralized mnemonics is not practical in extreme scenarios facing personal threats, often perceived by attackers as a refusal to cooperate, which instead intensifies violent behavior. In response to wrench attacks, a more prudent strategy should be "there's something to give, and losses are controllable":

• Set up an inducement wallet: Prepare an account that appears to be the main wallet but only holds a small amount of assets for "stop-loss feeding" in times of danger.
• Family security management: Family members need to master the basic knowledge of asset locations and response coordination; set up a safety word to signal danger in case of unusual situations; strengthen the safety settings of home devices and the physical security of the residence.
• Avoid exposing your identity: Avoid flaunting wealth or sharing trading records on social platforms; avoid revealing your holding of encryption assets in real life; manage your circle of friends' information to prevent leaks from acquaintances. The most effective protection is always to make people "not know that you are a target worth monitoring."

Conclusion

With the rapid development of the encryption industry, understanding customer ( KYC ) and anti-money laundering ( AML ) systems plays a key role in enhancing financial transparency and preventing illegal capital flows. However, during the implementation process, especially in terms of data security and user privacy, there are still many challenges. For example, the large amount of sensitive information ( collected by platforms to meet regulatory requirements, such as identity and biometric data, if not protected properly, may become a target for attacks.

Therefore, we recommend introducing a dynamic risk identification system based on traditional KYC processes to reduce unnecessary information collection and lower the risk of data leakage. At the same time, the platform can connect to professional anti-money laundering and tracking platforms to assist in identifying potential suspicious transactions, thereby enhancing risk control capabilities from the source. On the other hand, building data security capabilities is equally essential. By utilizing professional red team testing services, the platform can receive support for attack simulations in real environments, comprehensively assessing the exposure paths and risk points of sensitive data.

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