Physical attacks targeting cryptocurrency holders are escalating in severity even as the industry’s digital security improves, highlighting a growing gap between on-chain protections and real-world personal safety risks.
What Happened
Data compiled by Haseeb Qureshi, Magaging Partner at Dragonfly and visualized in a public dataset tracking so-called “wrench attacks” shows that while crypto adoption has scaled and normalized risk metrics have declined, the absolute number of violent incidents, including kidnappings and fatalities, has continued to rise.
The shift suggests that crypto’s maturation is moving risk from cyberspace into the physical world.
Severity Rises As Crypto Scales
The dataset categorizes incidents from minor thefts to fatal attacks.
Serious cases, defined as armed robbery, kidnapping, or home invasion, account for more than half of all recorded incidents, while severe and fatal attacks together represent a material share.
The yearly breakdown shows a steady increase in high-severity cases since 2020, with 2025 marking the highest concentration to date.
This escalation comes despite improvements in wallet security, custody tooling, and user education.
As market capitalization expanded, attackers appear to have shifted focus toward coercion rather than technical exploitation, targeting individuals perceived to control significant on-chain value.
Normalization Tells A Different Story
When adjusted for adoption, the picture is more nuanced.
Normalized charts tracking attacks per million users at Coinbase and attacks per billion dollars of total market capitalization show a long-term decline from early peaks in the mid-2010s.
By those measures, crypto is statistically safer today than in its early years.
Yet absolute counts and the intensity of violence, continue to climb.
Analysts say this divergence signifies a paradox of scale, where as crypto becomes safer on average, it becomes more dangerous for a smaller subset of visible holders.
In effect, growth concentrates risk on individuals rather than protocols.
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Self-Custody’s Unsolved Problem
The trend reframes self-custody as a human security issue rather than a purely technical one.
Multisignature wallets, hardware devices, and privacy tools offer limited protection against physical coercion. Once an attacker applies force, cryptographic guarantees can fail in practice.
Industry participants increasingly acknowledge that the weakest link is no longer software but exposure.
That has sparked interest in features designed to reduce physical attack surfaces, including delayed withdrawals, social recovery, decoy balances, and custody abstraction that obscures who controls funds at any given time.
Implications For Adoption and Regulation
The rise in physical attacks carries implications for mainstream adoption and policy.
Regulators have focused heavily on exchange security and compliance, but the data suggests personal safety risks may become a parallel concern as more wealth migrates to bearer assets.
Insurers and custodians are also reassessing coverage and threat models that extend beyond digital breaches.
Why It Matters
Looking ahead, market observers expect the next phase of crypto infrastructure to prioritize plausible deniability and personal safety alongside privacy and compliance.
As the industry grows, the challenge may be less about defending blockchains and more about protecting people.
The data points to a clear conclusion where crypto’s success is changing the nature of risk.
While hacks are harder to execute, coercion is becoming more common and leaving physical security as one of the industry’s least resolved vulnerabilities.
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