The Shadow of Off-Chain Attacks: The Threat of Ransomware Attacks Facing the Encryption Industry

In the blockchain world, we often discuss security risks such as on-chain attacks and smart contract vulnerabilities, but a recent series of events reminds us that risks are spreading to off-chain.

A crypto billionaire recounted an attempted kidnapping case he experienced in court. The attackers tracked his movements through GPS tracking and forged documents, launching an attack from behind when he was caught off guard, attempting to suffocate him with a bag and gain control. Fortunately, the victim fought back vigorously and managed to escape.

As the value of encryption assets continues to rise, physical attacks targeting crypto users are becoming increasingly frequent. This article will conduct an in-depth analysis of these attack methods, review typical cases, outline the criminal chain behind them, and propose practical prevention recommendations.

Definition of Wrench Attack

The concept of "wrench attack" originates from a web comic, referring to attackers who do not use technical means, but instead use threats, extortion, or even kidnapping to force victims to hand over passwords or assets. This method of attack is direct, efficient, and has a low entry threshold.

Case Study Review

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

In early May, French police successfully rescued the father of a kidnapped encryption tycoon. The kidnappers demanded a huge ransom and brutally harmed the hostage to pressure the family.

In January, a co-founder of a hardware wallet company and his wife were attacked at home by armed assailants, who also committed acts of violence and filmed the incident, demanding a payment of 100 bitcoins.

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

Another shocking case in the industry occurred in New York. An Italian crypto investor was lured to a villa, where he was subjected to three weeks of captivity and torture. The criminal gang used various means to threaten the victim, forcing him to hand over his wallet private keys. Notably, the perpetrators were "insiders", who accurately targeted their victim through off-chain analysis and social media tracking.

In mid-May, the daughter and young son of a co-founder of a certain encryption trading platform were almost forcibly kidnapped on the streets of Paris. Fortunately, passersby came to their aid in time, preventing a tragedy.

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

In addition to publicly reported cases, security agencies have also found that some users encountered control or coercion from the other party during offline transactions, resulting in asset damage while organizing victim information.

In addition, there are some "non-violent coercion" incidents. Attackers threaten victims by掌握 their privacy, whereabouts, and other information, forcing them to transfer funds. Although this type of situation does not cause direct harm, it has already touched the boundaries of personal threats.

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 various concerns, which also makes it difficult to accurately assess the true scale of off-chain attacks.

Crime Chain Analysis

Based on multiple typical cases, we can summarize that the criminal chain of wrench attacks roughly covers the following key links:

1. Information Locking

Attackers usually start with on-chain information, combining transaction behavior, label data, NFT holdings, etc., to make a preliminary assessment of the target asset scale. At the same time, social media statements, public interviews, and even some leaked data also become important supplementary intelligence sources.

2. Realistic Positioning and Contact

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

• Induce targets to leak information on social platforms
• Use public registration data ( such as ENS bound email, domain registration information ) for reverse lookup.
• Use leaked data for reverse search
• Control the target 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 wallet private keys, mnemonic phrases, and two-factor authentication permissions. Common methods include:

• Physical injuries such as beating, electric shocks, and amputations
• Coerce the victim to perform the transfer
• Intimidate relatives and demand family members to make the transfer.

4. Money Laundering and Fund Transfer

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

• Use a mixer to obscure the source of funds
• Transfer to controlled addresses or non-compliant centralized exchange accounts
• Cash out assets through off-chain trading channels or black markets.

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.

Measures

In the face of wrench attacks, using multi-signature wallets or decentralized mnemonic phrases is not practical in extreme scenarios and may instead escalate violent behavior. A more prudent strategy should be "give and take, with controllable losses":

• Set up an inducement wallet: Prepare an account that appears to be the main wallet but only holds a small amount of assets, to be used for "stop-loss feeding" in case of danger.
• Family Safety Management: Family members need to understand the basic knowledge of asset location and cooperation in response; set up safety words to convey danger signals in case of unusual situations; reinforce the security settings of home devices and the physical security of the residence.
• Avoid identity exposure: Avoid flaunting wealth or sharing transaction records on social platforms; avoid disclosing possession of encryption assets in real life; manage information within your circle of friends to prevent acquaintances from leaking information. The most effective protection is always to make people "not know that you are a target worth focusing on."

Conclusion

With the rapid development of the encryption industry, understanding your customer ( KYC ) and anti-money laundering ( AML ) systems play a key role in enhancing financial transparency and preventing illegal fund flows. However, during the execution process, especially in terms of data security and user privacy, there are still numerous challenges. For example, the large amounts of sensitive information ( collected by platforms to meet regulatory requirements, such as identity and biometric data, once inadequately protected, may become a breakthrough point 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 breaches. At the same time, the platform can integrate with 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 also essential. By leveraging the red team testing services of professional security agencies, the platform can obtain support for attack simulations in real environments and comprehensively assess the exposure paths and risk points of sensitive data.

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