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The crypto crime wave is hitting even the most tech-savvy people in the world. As cryptocurrencies become more sophisticated, criminals are stepping up their game.
While cryptocurrencies have brought great wealth to investors, tech entrepreneurs, and many others, it has also brought with it a shadow of danger. Violent crimes such as kidnappings and “key attacks” are increasingly targeting crypto owners. In some countries, criminals are committing violent crimes with the express purpose of targeting crypto owners. From France and the United States to the United Kingdom and beyond, criminals are doing more than just digital heists and are instead resorting to physical confrontations. That makes it all the more important for crypto investors to consider their security.
The Global Rise of Crypto Crime
As the price of cryptocurrencies like Bitcoin has risen above $100,000, we know that it has caught the attention of criminals. Millions of dollars worth of wealth stored in cryptocurrency wallets are not difficult to track down and, unlike bank accounts, there is little oversight. This has led to a rise in so-called “wrench attacks,” where a simple tool like a $5 wrench is used to force someone’s private keys.
The crimes have shaken the crypto community in France. Gunmen have reportedly attempted to kidnap the wife and child of a wealthy entrepreneur who started his own cryptocurrency exchange on a busy street in Paris. In some cases, hostages have also been held and beaten for millions in cryptocurrencies, leading to injuries.
The same is true in the US and UK. In New York, an investor was tortured into giving up his Bitcoin holdings, and in the UK, a robber forced a crypto owner to transfer his Bitcoin. These cases are reminders that the more public your crypto wealth, the greater the risk.
Why crypto owners?
Crypto is scary for a reason: its design is attractive – to criminals. Payments are anonymous, irreversible and untraceable, which makes it a good tool for extortion, because the risk to the victim is very low. Many investors paint themselves as a target, bragging about their wealth on social media. Lamborghinis, luxury watches and stories of crypto profits are surefire ways for criminals to target you, and having millions of dollars in just one wallet is another reason to multiply all these risks.
Offline storage mechanisms like hardware wallets are becoming increasingly popular as a way to protect against hackers – but they can still be stolen. If a stolen wallet is compromised with a password or seed phrase, criminals suddenly own millions of cryptocurrencies, so organized crime groups see crypto holders as high-reward, low-risk targets.
To respond to the rising threat of ransomware and kidnapping, crypto investors need to do more to protect themselves.
Here’s what you can do to protect yourself:
Don’t brag about it: Don’t brag about your cryptocurrency wealth on social media. Never post about your assets, trading successes, or luxury properties on social media. Such criminal groups often use sites like X or Instagram to find rich crypto holders.
Use multi-key wallets for storage: These use multiple keys for transactions, so even if a thief only has one key, everything is still safe. The less paper you write your seed phrases on, the better, and it’s better to store them in a bank safe deposit box or other secure location rather than digitally.
Increase your physical security: Treat your hardware wallet the same way you would your cash or jewelry. Install a home safe or CCTV camera and alarm, and if you have buckets of cash, hire a professional security service. Whatever you do, don’t publicly advertise your home address or schedule.
Prepare for the worst: Protect your crypto assets by using legal tools like trusts. When you include digital assets in your estate plan, it locks everyone else out. Some investors keep crypto funds in “fake” wallets to fool thieves.
Be careful: We suggest you be wary of unsolicited messages or calls about your crypto assets, as they are all too common. Thieves may pose as friends, businessmen or even fake police officers, so, as always, verify your identity before giving out personal information.
The Way Forward
As Bitcoin spreads from the digital realm to the physical world, investors can no longer rely on the security measures used exclusively for digital assets, such as strong passwords and secure exchanges. While countries like France have promised to increase police protection for crypto entrepreneurs, the truth is that individuals are on their own when it comes to security.
Crypto is great because it’s open and you can make money. But that freedom comes with risks. Through privacy, wealth preservation, and personal security, investors are navigating these dangerous times with speed. We know the crypto revolution is upon us, but we must be careful.
Sources: CoinDesk, Reuters, Chainalysis, X posts by verified analysts
