Wrench Attacks Surge 75% to $40M Losses Amid Extreme Fear Market Sentiment

VADODARA, February 2, 2026 — Physical "wrench attacks" targeting cryptocurrency holders surged 75% globally last year, causing over $40 million in losses. According to a study by blockchain security firm CertiK, criminals executed 72 violent incidents to steal private keys. This latest crypto news highlights a dangerous convergence of digital asset theft and real-world violence. Market structure suggests these attacks correlate with periods of extreme fear sentiment, currently at 14/100.

Investigation: The Anatomy of a 75% Surge in Physical Crypto Crime

CertiK's forensic report, cited by CoinDesk, documents 72 wrench attacks in 2025. This marks a 75% increase from the previous year. Criminals use physical coercion to extract private keys or seed phrases from victims. Europe emerged as the primary hotspot. France recorded 19 incidents, double the United States' total. Total financial losses exceeded $40 million. These figures represent only reported cases. The actual number likely skews higher due to underreporting.

Market analysts attribute the spike to several factors. Rising cryptocurrency valuations increase potential loot. , decentralized finance (DeFi) protocols often lack robust KYC/AML checks. This creates opaque transaction trails. Consequently, criminals perceive lower prosecution risks. The CertiK study on wrench attacks provides the primary data, but on-chain liquidity maps indicate suspicious outflow clusters in affected regions.

Market Context & Historical Precedent

Historically, crypto crime focused on digital exploits like exchange hacks or smart contract bugs. The 2017-2018 cycle saw massive exchange breaches. In contrast, the 2021-2022 cycle emphasized DeFi protocol drains. The current shift to physical violence represents a new phase. It mirrors traditional financial crime patterns where asset concentration attracts violent theft. Underlying this trend is the growing mainstream adoption of self-custody wallets.

Market structure currently exhibits extreme fear, with the Crypto Fear & Greed Index at 14/100. This environment may exacerbate physical targeting. Fearful holders might make security mistakes. They could also become more visible targets during panic selling. Related developments include Bitmain's large ETH acquisition and Ripple's XRP escrow activity, both occurring amid similar sentiment.

Technical Architecture & Price Action Implications

On-chain data indicates a correlation between attack frequency and market volatility spikes. The 75% surge occurred alongside Bitcoin's test of the $78,356 level. This price point sits near a critical Fibonacci 0.618 retracement zone from the 2024 all-time high. A breach below $75,000 would invalidate the current bullish structure. RSI readings on daily charts show oversold conditions, typical of extreme fear periods.

Market structure suggests wrench attacks create a "security risk premium." This premium pressures prices by increasing the perceived cost of holding physical custody. Consequently, institutional players may accelerate migration to regulated custodians. Technical analysis from TradingView charts shows increased selling volume during weeks with reported attacks. This forms a bearish order block that must be reclaimed for trend reversal.

By The Numbers

Why It Matters

This surge matters because it directly impacts portfolio security and market psychology. Physical attacks shift risk from digital to real-world domains. Institutional liquidity cycles now must account for physical security costs. Retail market structure faces fragmentation as users flee self-custody. Evidence from SEC.gov filings shows increased regulatory scrutiny on custody solutions. This could accelerate compliance mandates.

, the $40 million loss figure likely underestimates true impact. Many victims avoid reporting due to fear or privacy concerns. On-chain forensic tools like Etherscan reveal unrecovered funds moving through mixers. This creates permanent supply shocks. Market analysts note that such shocks can create artificial scarcity, paradoxically supporting prices long-term.

Expert Commentary

"The 75% surge in physical attacks represents a market failure in security infrastructure. It's not just a crime statistic; it's a liquidity indicator. When holders fear for physical safety, they migrate to custodial solutions, centralizing control and creating systemic risks. The extreme fear sentiment at 14/100 amplifies this behavior, potentially leading to capitulation events."

Market Outlook & Price Scenarios

Market structure suggests two primary scenarios based on current data. The extreme fear sentiment at 14/100 creates a volatile baseline. Historical cycles indicate such periods often precede trend reversals. However, the wrench attack surge adds a unique physical risk dimension.

• Bullish Invalidation Level: $85,000. A sustained break above this resistance would confirm the extreme fear sentiment has been absorbed. It would indicate institutional accumulation overcoming physical security fears, potentially driven by events like Coinbase's new futures listings.
• Bearish Invalidation Level: $75,000. This Fibonacci 0.618 support must hold to maintain the current market structure. A breach would validate the extreme fear sentiment, likely triggering further physical security concerns and accelerating the shift to custodial solutions.

The 12-month institutional outlook hinges on regulatory response. If agencies mandate enhanced custody standards, attacks may decline but centralization risks rise. This could reshape the 5-year horizon toward more regulated, less decentralized models. On-chain data indicates smart contract platforms like Ethereum may benefit from institutional trust mechanisms.