Crypto Hardware Wallet Security Risks
· automotive
Wallet Wars: Hardware Security Breaches Expose Crypto Owners to New Risks
Recent data breaches at shipping companies serving Trezor and SafePal have shed light on a concerning trend in the crypto industry. Thousands of customers had their personal data stolen, including names, home addresses, email addresses, and phone numbers. These hacks did not compromise the security of the wallets themselves but expose owners to physical attacks that rely on obtaining the seed phrase stored on the wallet.
The hackers targeted shipping companies’ databases, which contained sensitive information about high-net-worth crypto holders. This kind of personal data can be used to launch physical attacks on individuals, exploiting their home addresses and other identifying details. The rise of wrench attacks – using force or violence to obtain a seed phrase – is a disturbing trend in crypto-related crime.
According to CertiK, there has been a significant increase in reported wrench attacks during 2025, resulting in upwards of $40 million stolen. Chainalysis estimates that this year’s figures are closer to $30 million, with gangs resorting to kidnapping and home invasions to demand seed phrases. In some cases, hackers have even guessed passwords set by customers, as seen in the recent attack on Coinkite’s Coldcard hardware wallet.
The breach highlights the ongoing cat-and-mouse game between crypto security measures and determined hackers. The fact that attackers were able to predict seed phrases generated offline for Coinkite’s customers underscores the need for more robust security protocols. Hardware wallet makers must work closely with shipping companies and other partners to ensure that sensitive information is handled securely.
In the wake of these breaches, it’s essential to examine the code itself – a single vulnerability in 2021 was enough to compromise Coinkite’s system. This is not a case of user error or malicious intent; it’s a reminder that even the most seemingly secure systems can have hidden weaknesses. The industry must acknowledge its vulnerabilities and work towards creating more robust measures to protect users’ funds.
Implementing better encryption methods, conducting regular security audits, and educating customers on how to stay safe in the face of evolving threats are crucial steps forward. As we move forward, it will be essential for crypto companies to prioritize security and transparency. The wallet wars are far from over; crypto owners need to be aware of these new risks and take steps to secure their assets. Only through vigilance and cooperation can we protect the integrity of the crypto industry.
Reader Views
- TGThe Garage Desk · editorial
The cat-and-mouse game between crypto security and hackers has reached a disturbing new level with the rise of wrench attacks. While hardware wallet manufacturers are quick to tout their products' offline capabilities, they're conveniently overlooking the fact that a seed phrase is only as secure as its weakest link – namely, the user's personal life. If we can't even keep our own addresses and phone numbers safe from prying eyes, then what good are the strongest security protocols in the world?
- SLSara L. · daily commuter
It's time for hardware wallet makers to stop relying on users to be responsible with sensitive information and start taking more responsibility themselves. While seed phrases are supposed to be offline-generated, it's clear that attackers can still guess them with enough data. Shipping companies need stricter protocols for handling customer info, but wallet manufacturers also need to rethink their design. Perhaps it's time for hardware wallets to store seed phrases securely within the device itself, rather than relying on user discipline.
- MRMike R. · shop technician
The article mentions wrench attacks, but what's equally concerning is the fact that hackers can still guess passwords set by customers, as seen in the Coinkite breach. This highlights a crucial weakness in the design of hardware wallets: password security is still largely up to the user. In contrast, biometric authentication or more advanced encryption protocols could significantly reduce this risk. Hardware wallet makers should prioritize integrating these features rather than simply relying on education and best practices for users to follow.