The rise in physical attacks known as '$5 wrench attacks' on cryptocurrency investors has led to increased interest in crypto custody services. These attacks, aimed at stealing crypto assets, have been increasingly sophisticated and public, escalating concerns among investors regarding their personal safety. Traditionally, the mantra 'not your keys, not your coins' advocated for self-custody; however, many investors are now turning to regulated custodians for added security. Custodians like HashKey are witnessing inflows from high-net-worth individuals seeking to protect their assets from theft. While cold wallets offer security, they are vulnerable to attack, prompting a shift toward solutions like multiparty computation (MPC) and multisignature wallets, which reduce a single point of failure. Furthermore, regulatory changes are incentivizing institutional engagement in crypto, fostering new custody considerations. The perception of risk around crypto investors may change as more assets are held in custodial solutions, potentially deterring attacks. Experts suggest that public awareness and regulatory measures can raise the cost for attackers, suggesting that both centralized and decentralized custodians have roles to play in the evolving security landscape for crypto assets.

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