New Threats in the Blockchain World: Offline Physical Attacks

With the development of Blockchain technology, we often focus on network security issues such as on-chain attacks and smart contract vulnerabilities. However, a series of recent events remind us that threats have spread to the real world.

Last year, a cryptocurrency billionaire recounted his experience of a kidnapping attempt during a court hearing. The criminals tracked his movements using GPS tracking and forged documents, attempting to attack and subdue him from behind as he went upstairs. Fortunately, the entrepreneur fought back fiercely and managed to escape by biting off one of the assailant's fingers.

This incident is just the tip of the iceberg. As the value of crypto assets continues to rise, physical attacks targeting crypto users are becoming increasingly frequent. This article will delve into these types of attack methods, review typical cases, explore the criminal chain behind them, and provide practical prevention suggestions.

Definition of Wrench Attack

The concept of "wrench attack" originates from an online comic that depicts a scenario where an attacker does not use complex technical means, but instead uses simple threats or violence to force the victim to hand over passwords or assets. This type of attack is direct, efficient, and has a low barrier to implementation.

Review of Typical Cases

Since the beginning of this year, there has been a frequent occurrence of kidnapping cases targeting cryptocurrency users, with victims including core members of projects, industry opinion leaders, and even ordinary users.

In early May, French police successfully rescued the father of a cryptocurrency tycoon. The kidnappers cruelly severed the victim's fingers to demand a huge ransom.

In January, the co-founder of a well-known hardware wallet company and his wife were attacked at home. The kidnappers also used extreme violence and demanded a ransom of 100 Bitcoins.

In June, a suspect involved in planning multiple kidnappings of French cryptocurrency entrepreneurs was arrested in Morocco. The suspect is believed to be one of the masterminds behind the kidnapping case of the founder of the aforementioned hardware wallet company.

In New York, an Italian crypto investor was subjected to three weeks of illegal detention and torture. The criminal gang used various cruel methods to threaten the victim and force him to hand over his wallet private keys. What makes this case unique is that the perpetrators were "insiders" who precisely targeted the victim through on-chain analysis and social media tracking.

In mid-May, the daughter and young grandson of a cryptocurrency exchange platform founder were nearly kidnapped on the streets of Paris. Fortunately, passersby bravely came to their aid, preventing a tragedy.

These cases reflect that, compared to on-chain attacks, offline violent threats are more direct, efficient, and have a lower implementation threshold. It is worth noting that the participants in such crimes are generally younger, mostly aged 16 to 23, and possess basic knowledge of cryptocurrency.

In addition to the major cases reported by the media, there are also many small-scale offline trading risk incidents. Some users have faced control or coercion from the other party during face-to-face transactions, resulting in asset losses.

In addition, there are some "non-violent coercion" incidents, such as attackers threatening victims by掌握 their privacy information, forcing them to transfer funds. Although these situations have not caused direct physical harm, they have touched the boundaries of personal safety.

It is important to emphasize that the disclosed cases may only be a small part of the issue. Many victims choose to remain silent for various reasons, which also makes it difficult to accurately assess the actual scale of offline attacks.

Crime Chain Analysis

According to a study by the University of Cambridge, cases of violent threats against cryptocurrency users show a certain pattern. By combining several typical cases, we can summarize that the criminal chain of wrench attacks usually includes the following key links:

1. Information Locking: Attackers first analyze the target's asset scale through on-chain data, while also combining various intelligence such as social media information.

2. Real Positioning and Contact: After determining the target's identity, the attacker will attempt to obtain their real-life information, including residence, daily activities, etc. Common methods include social platform inducement, public information queries, and the use of leaked data.

3. Violent Threats and Extortion: After controlling the target, attackers usually use violent means to force the victim to hand over the private key or carry out asset transfers.

4. Money Laundering and Fund Transfer: After gaining control of the assets, the attacker will quickly transfer the funds, attempting to conceal the source of the funds through mixers and multiple transfers.

Countermeasures

In the face of wrench attacks, traditional security measures such as multi-signature wallets or distributed mnemonic phrases may not be practical. A more prudent strategy is "give to gain, and losses are controllable":

• Set up a decoy wallet: Prepare a wallet that appears to be primary but actually holds only a small amount of assets, to deal with emergencies.
• Family Security Management: Family members should understand the basic asset situation and response strategies; set up safety codes; enhance physical security at home.
• Avoid identity exposure: Carefully manage social media information and avoid disclosing cryptocurrency asset holdings in real life.

Conclusion

With the rapid development of the cryptocurrency industry, KYC and AML systems play an important role in enhancing financial transparency. However, there are still many challenges faced during implementation, especially in terms of data security and user privacy protection.

To this end, it is recommended to introduce a dynamic risk identification system based on the traditional KYC process to reduce unnecessary information collection. At the same time, the platform could consider integrating professional anti-money laundering and tracking services to enhance risk control capabilities from the source. In addition, strengthening data security capacity building is also crucial, and potential risks can be comprehensively assessed through professional security testing services.