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    Home»Bitcoin»Do Panic Wallets Protect Holders from Wrench Attacks?
    Bitcoin

    Do Panic Wallets Protect Holders from Wrench Attacks?

    Ethan CarterBy Ethan CarterDecember 8, 2025No Comments4 Mins Read
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    Do Panic Wallets Protect Holders from Wrench Attacks?
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    On December 1 in Val‑d’Oise, France, the father of a Dubai-based crypto entrepreneur was abducted from the street. This incident marks another addition to Jameson Lopp’s registry of over 225 verified physical assaults on digital asset holders.

    The database that Lopp, chief security officer at Bitcoin wallet Casa, has curated for six years indicates a rapid increase in coercion, with an astounding 169% rise in reported physical attacks anticipated in 2025.

    This risk is not exclusive to crypto: Gold brokers, luxury item resellers, and cash couriers have encountered violence for ages. What’s new is the face-to-face theft of digital assets.

    This change is driving a new competition in wallet design. “Panic wallets” are equipped with duress triggers that can promptly erase balances, dispatch false decoys, or summon help through subtle biometric gestures.

    The concept seems flawless until complications arise. As Lopp mentioned to Cointelegraph, “Ultimately, the use of duress wallets hinges on speculations about the assailant, and one cannot definitively know their intentions and understanding.”

    The data behind the fear

    Lopp’s findings imply that wrench attacks align with market trends. They increase during bull markets and periods of significant over-the-counter (OTC) trading, when substantial trades occur off exchanges. The US records the highest absolute numbers, though the per-capita risk is greater in the United Arab Emirates and Iceland.

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    Source: Jameson Lopp

    Approximately a quarter of the incidents involve home invasions, often facilitated by leaked Know Your Customer (KYC) information (as Lopp bemoans, “Kill Your Customer”) or doxing from public records. Another 23% are kidnappings. Two-thirds of assaults are successful, and around 60% of known assailants are apprehended.

    The trend line roughly corresponds to Bitcoin’s (BTC) price fluctuations. Each retail frenzy draws in new capital and targets into the spotlight, prompting criminals to pursue returns on investment like anyone else.

    Related: Crypto user attacked in France over Ledger hardware wallet — Report

    Testing the panic gesture

    If digital self-defense is advancing, it does so in the absence of evidence. “We cannot definitively conclude the efficiency of duress wallets/triggers since our data is scarce,” Lopp notes.

    Related: Bitcoin ’wrench attacks’ on track to double its worst year

    He knows of one victim who attempted to use a decoy wallet but failed to deceive the attacker, and another who complied immediately but was tortured for hours because the thief suspected he had undisclosed reserves.

    The builders fighting back

    Matthew Jones, co-founder of Haven, experienced a harsh lesson. While trying to trade 25 BTC in Amsterdam, his counterpart escaped in a waiting van. His images aided Europol in tracking the gang across Europe, but none were caught.

    Jones transformed that ordeal into a solution: a biometric, multi-party custody system based on “continuous authentication without exposing identity.”

    Haven’s biometric wallet secures transfers behind a live facial scan stored exclusively on the user’s device. Larger transactions, exceeding $1,000, demand real-time approval from a secondary verifier, such as a spouse or partner.

    Altering that contact triggers a 24-hour waiting period, rendering on-the-spot coercion nearly ineffective. Jones emphasizes, “It’s about having the cash in your wallet stolen rather than having your bank accounts depleted. Thus, it’s about determining your risk tolerance and the amount you choose to hold.”

    Related: Are seed-phrase-free crypto wallets the key to mass self-custody? Expert weighs in

    The custody dilemma

    As physical coercion escalates and privacy regulations like the Organization for Economic Cooperation and Development’s Crypto-Asset Reporting Framework tighten, even seasoned Bitcoin enthusiasts are reexamining self-custody. Some now opt for custodianship over personal hazards.

    Lopp views this development as disastrous. “If enough individuals conclude that Bitcoin self-custody is too perilous to pursue, it will result in massive centralization and systemic risk for the entire network. This is a battle I’ve fought against for a decade.”

    This presents the paradox central to crypto security in 2025: Each safeguard, from stricter KYC databases to offchain biometrics, reduces anonymity and expands the attack surface.

    Related: The case for a ‘non-mandatory KYC’ model — Interview with Toobit

    What actually works

    Amidst all the innovation, the easiest protection remains social discretion. Lopp advises, “The most effective measure a Bitcoiner can take to mitigate their wrench attack risk is quite challenging: Avoid discussing Bitcoin, at least not while using your real name or face.”

    As hardware wallets adopt panic modes and regulators require more visible ownership, the only defenses that are likely to scale may be cultural. Most successful wrench attacks occur because the victim can be located, not due to the wallet being compromised.

    Magazine: 2026 is the year of pragmatic privacy in crypto — Canton, Zcash and more