Wrench attacks drive crypto investors to centralized custodians

Wrench attacks—physical coercion or violence aimed at forcing cryptocurrency holders to surrender their private keys or transfer funds—have become increasingly common and are pushing crypto investors toward centralized custodians for asset security.

These attacks have targeted prominent investors, executives, and affluent individuals in the blockchain industry, making the traditional crypto saying of "not your keys, not your coins" less appealing to those fearing physical harm.

Centralized custodians, including regulated third-party custody services, are seeing a notable rise in demand as they offer enhanced security measures such as multi-signature wallets, on-chain governance, and institutional-grade protection that can mitigate the risks of physical coercion by removing direct control from the individual investor.

The risks that drive this shift include:

• Physical threats such as kidnapping, extortion, and home invasions that bypass cybersecurity defenses by targeting the user personally.

• Increased visibility of crypto wealth via social media or public appearances, making investors attractive targets.

• The convenience of centralized custody in managing security protocols like whitelisting and two-factor authentication, which are harder to enforce in self-custody scenarios under duress.

Data shows that wrench attacks are rising sharply in 2025, with regions such as Asia-Pacific being severely affected. Chainalysis reported that such attacks have contributed significantly to crypto theft losses this year, with more than 35 wrench attacks recorded globally by mid-2025 and a trend toward targeting retail holders who control assets personally rather than just institutional platforms.

In response, many high-net-worth individuals and crypto investors are consulting custody service providers to transition from self-custody cold wallets to institutional custody solutions that emphasize security through decentralization of control and regulatory oversight.

However, concerns remain about trust in custodians. Discussions in crypto communities highlight skepticism about the possibility of custodians themselves misappropriating funds, underscoring the necessity for multi-signature arrangements and transparent safeguards to ensure custodial integrity.

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