In cryptography, there’s a well-known idea: why would I break your encryption when I can just threaten you until you tell me the password? It’s a real threat that serious crypto holders need to think about.
What the $5 Wrench Attack Is
No amount of cryptographic sophistication protects against a direct physical threat. If someone knows you hold significant crypto and is willing to use coercion, they don’t need to hack anything. They just need you to cooperate under pressure.
Don’t Publicize Your Holdings
The first line of defense is not becoming a target. Don’t tell people how much crypto you hold. Don’t post screenshots of your portfolio on social media. Don’t discuss your holdings at parties. The fewer people who know, the safer you are.
The Decoy Wallet
With a passphrase, you can maintain two separate wallets from the same seed phrase: one with a small amount (the decoy), and one with your real holdings (protected by the passphrase). Under duress, you reveal the seed phrase to the decoy wallet. Your actual funds remain safe behind the passphrase they don’t know exists.
Operational Security
Serious crypto holders practice OPSEC — being deliberate about who knows what. Not wearing crypto merchandise in public. Not confirming or denying holdings when asked. Being the boring person in the room when the conversation turns to crypto wealth.
— Lior H