A French family was held captive for hours by assailants targeting their crypto holdings. Law enforcement has not disclosed how the culprits located the home, exposing a critical blind spot in the industry’s security data.
At approximately 4 a.m. on September 20, four masked individuals broke into a residence in northern France. They restrained the parents and two children using black tape, compelling the father to surrender his security codes and transfer 40,000 euros.
The father works as a salaried IT professional within the cryptocurrency sector. Prosecutors have not yet revealed how the attackers targeted him.
Another occurrence during the same month demonstrated the ease with which such details leak. On August 13, hardware wallet producer Trezor notified 13,689 users that a security breach at a third-party shipping partner compromised confidential order records, a figure that later escalated to over 80,000.
While the two occurrences are unrelated, they illustrate the same vulnerability from opposite perspectives: databases that couple home addresses with evidence of digital asset ownership, and the real-world dangers when bad actors exploit that correlation.
BeInCrypto spoke with specialists from Hacken and Zama to investigate the obligations of a service provider when a vendor compromises customer identities, which records the sector should eliminate, and how clients can evaluate whether a custodian will hold up under duress.
What “No Keys Compromised” Leaves Out
When Trezor reported the August breach, it emphasized that no internal breaches occurred and its hardware devices remained secure.
Those guarantees addressed the exact threat hardware wallets are built to mitigate: the theft of funds.
However, Dmytro Yasmanovych, Head of GRC and Security Operations at Hacken, noted that a lack of stolen private keys does not guarantee safety for users.
“Someone who knows your name, home address, and that you own a hardware wallet has information they can use to target you. You can replace a compromised key in minutes. You cannot do the same with your home address.”
He contends that details managed by shipping vendors and auxiliary partners merit just as much scrutiny as the wallet itself. If a database connects a token holder to their residence, the fallout can endanger their family members as well, Yasmanovych added.
“So a provider can prevent anyone from accessing your funds and still leave you exposed in a much more personal way. The question is whether its security measures protect the customer, not just the wallet.”
The French Numbers Behind the Warning
France exemplifies these risks. Interior Minister Laurent Nuñez reported in late June that authorities documented over 70 violent, cryptocurrency-associated offenses since January.
Chainalysis, tracking publicly documented instances, logged 30 incidents in France through the middle of 2026, compared to 19 throughout all of 2025.
The analytics firm attributes the rise primarily to data leaks. It highlighted a 2024 incident wherein a French tax employee allegedly stole files containing personal information, phone numbers, and addresses of high-net-worth investors, subsequently selling them to criminal networks.
The familial risks outlined by Yasmanovych are evident in these statistics. Over 40% of incidents in France targeted a family member instead of the primary account holder. Furthermore, home invasions accounted for 37% of recorded offenses by mid-2026, rising from 26% in 2023.
Chainalysis estimated that physical attacks against holders globally yielded more than $30 million during the first half of the year, accounting solely for instances where victims surrendered funds.
Total exposure reached $107 million when factoring in extortion demands, frozen transfers, and recovered assets, though the firm emphasizes that these metrics capture only reported incidents.
The Data Behind the Target
Such assaults require targets, which often originate from retained records. Consequently, data retention practices represent a major cybersecurity concern for the cryptocurrency market.
While firms often require client information for specific transactions or services, holding data indefinitely creates severe vulnerabilities if leaks occur. This raises the question of which user details companies should stop gathering or purge more rapidly.
Yasmanovych points to telephone numbers as prime candidates for removal, explaining that while a company needs a number to coordinate delivery, retaining it in client databases for years is unnecessary.
If databases are compromised, those telephone numbers facilitate phishing campaigns, voice scams, and SIM-swapping attacks.
“I would remove the link between an order and a physical delivery address once the delivery is complete and there is no longer a business reason to keep it. The company can retain what it needs for tax and warranty purposes without keeping a complete record of where every order was delivered.”
He highlighted another issue: data deletion policies often rely entirely on self-reporting.
“In one case, a company had a ninety-day retention rule and written confirmation from its fulfilment partner that older records had been removed. Years of data was still sitting in their systems. That is why I would want evidence of deletion, not just a retention policy. If nobody checks whether the rule was followed, the rule offers little protection.”
A similar duty applies to post-exposure protocols. According to Yasmanovych, service providers must follow up warning emails with precise details regarding what data leaked.
“A leaked city is one thing. A name, home address, and proof of crypto ownership create a different level of risk…Someone whose address was leaked may need help arranging future deliveries without sharing it again… There should be a direct person or team to contact when the situation requires more than a standard FAQ.”
He noted that companies must also clarify what allowed the leak to occur. If fulfillment partners retain data past agreed schedules, customers deserve transparency on how firms intend to enforce future deletions.
“A warning email is the starting point. People need to know what happened, what they can do now, and whether the company has actually fixed the process that failed.”
Trezor’s actions following its breach align with these recommendations. The firm contacted impacted users individually, outlined whether their data exposure was partial or comprehensive, and cautioned them regarding phishing alongside physical security threats in September.
The company also committed to launching an anonymous delivery alternative featuring locker pickups, plain packaging, and automated purging of shipping identifiers.
Can Privacy Technology Close the Gap?
The challenge extends beyond data preserved off-chain. As financial activity transitions increasingly to public blockchains, transaction visibility introduces additional exposure.
Dr. Rand Hindi, CEO and Co-Founder of Zama, noted that the Trezor incident highlights systemic off-chain data retention flaws.
He argued that as institutional capital migrates onchain on a large scale, onchain confidentiality shifts from a mere feature to a mandatory requirement for engagement. Hindi cited Boston Consulting Group projections estimating that tokenized real-world assets could comprise roughly 16% of global investable assets by 2035.
Regulated institutions cannot function on public ledgers where every investment position and counterparty connection remains transparent, Hindi explained. He pointed to fully homomorphic encryption (FHE) as a solution that maintains compliance without sacrificing privacy.
“FHE allows computation directly on encrypted data – a transfer executes, an AML threshold is checked, eligibility is verified, all on ciphertext – with no validator or block explorer ever seeing a balance or other sensitive data. When a regulator requires access, a permissioned threshold of key holders (compliance team) authorises decryption enforced at the protocol layer, not through a policy.”
Privacy innovations can likewise reduce corporate data collection requirements without impeding verification processes.
Yasmanovych pointed out that zero-knowledge proofs enable exchanges to prove sufficient reserve assets to back customer balances without publishing individual account details.
Platforms can consequently share aggregate solvency evidence without exposing specific customer records, though this information remains accessible under appropriate circumstances, he added.
Depending on protocol architecture, authorized investigators can still review underlying records and audits via proper legal procedures.
He noted that selective disclosure operates on a comparable premise for identity checks, enabling services to verify specific user qualifications without processing entire identification documents or full customer profiles.
“Neither approach solves the problem of personal data held outside the blockchain. Transaction amounts, timing, and wallet connections may remain visible, while identity documents and home addresses continue to sit in exchange, delivery, and payment databases.”
Yasmanovych stressed that the vulnerability gap remains straightforward: platforms may enhance transaction privacy while leaving fulfillment and customer support data exposed elsewhere.
When the Credentials Are Real, and the Customer Is Not Free
The distinction between transactional privacy and personal safety becomes critical when clients are compelled to authorize fund transfers against their will. Custody providers may boast robust infrastructure and strict access controls.
However, those protections fail when account holders face physical coercion to surrender assets.
Yasmanovych observed that technical audits verify whether systems operate as designed, but fail to account for scenarios where users are forced into making transfers.
“I would test the withdrawal process under that kind of pressure. For example, a customer with valid credentials requests a large transfer while someone is coercing them. Can the provider recognise the situation, pause the withdrawal, or bring in someone else before the money leaves?”
He recommended mandatory safeguards including secondary approvals and time-locks on substantial withdrawals, which users cannot unilaterally disable during active sessions. Yasmanovych emphasized that these hurdles provide platforms a window to intervene when authenticated logins do not reflect voluntary customer actions.
“I would also ask to see the process in action. A policy can require a second approval, but that does not tell you whether the approval is genuinely independent or whether staff can bypass it. A live test would expose those weaknesses much faster than another clean technical audit.”
Ultimately, custody frameworks can function flawlessly while still failing the end user, because transactions ultimately depend on human operators who remain susceptible to intimidation.
Where the Responsibility Now Sits
Incidents in France demonstrate that cryptocurrency risks extend far beyond compromised wallets or stolen private keys. Customer names, residential addresses, phone numbers, and ownership proofs become dangerous when housed within centralized databases.
While privacy tools mitigate onchain visibility, they do not protect information maintained by companies and vendors off-chain.
This reality broadens the scope of provider responsibility, encompassing asset storage, transaction security, data collection scope, retention periods, and protocols for handling coerced credentials. While securing cryptographic keys is an established industry competency, physical safety now demands equal attention.