The term “$5 wrench attack,” coined long ago in crypto circles, refers to using physical coercion – like threatening someone with a wrench – to force them to hand over their private keys. It’s a vulnerability baked into the very nature of self-custody, where individuals are solely responsible for their digital fortune.
Garry Tan, head of Y Combinator, initially sounded the alarm about the San Francisco incident, sharing security footage before deleting the post. The victim, known only as Joshua, became the latest statistic in a growing trend tracked by security experts.
Jameson Lopp’s Warning
Casa co-founder and CSO Jameson Lopp has been meticulously documenting the rise in physical attacks targeting crypto owners. His research paints a worrying picture: kidnappings, home invasions, and outright abductions are becoming increasingly common, fueled by the allure of instant, irreversible wealth transfer.
As Lopp pointed out at Bitcoin 2025, these incidents tend to correlate with the price of Bitcoin. The higher the price, the bigger the target on the backs of crypto holders. He references an investigation conducted that suggests the problem is even more widespread than reported.
“Few folks appreciate that Bitcoin wrench attacks are currently carried out by amateurs. Just wait until the professionals show up.” – Jameson Lopp
Lopp is actively working on solutions at Casa, focusing on multi-signature vaults and inheritance protocols that distribute private keys across multiple trusted parties. The aim is to eliminate the single point of failure that makes individuals vulnerable to these attacks.
The San Francisco incident is far from isolated. The ease and finality of crypto transactions make them an attractive target for criminals worldwide.
Consider the recent case in Bangkok, where a Chinese national was abducted and forced to hand over both cash and USDT, as reported by Khaosod English. Or the British Columbia family subjected to 13 hours of torture for $2 million in crypto, detailed by MSN. And the five individuals in Oxfordshire, England, who lost a Rolex and £1.1 million in crypto to masked intruders, as reported by The Sun.
Faced with these escalating threats, many crypto holders are quietly abandoning self-custody altogether. The allure of exchanges like Coinbase or spot ETFs like BlackRock’s iShares Bitcoin Trust, which offer to handle security on their behalf, is proving too strong to resist.
Handing over private keys to third-party custodians offers peace of mind, but it comes at a cost. It undermines the fundamental principle of Bitcoin: decentralized, permissionless finance. Trading autonomy for security is a Faustian bargain that many are now willing to make.
However, relying solely on centralized custodians also introduces a new set of risks. As the space evolves, users must ensure that they are not merely trading one point of failure for another. Diversification, both digital and physical, may be the only true safeguard in this new era of crypto crime.
