With the soaring market value of cryptocurrencies, violent crime incidents targeting cryptocurrency holders have sharply increased globally, leading to an invisible 'kidnapping panic' spreading within the crypto community. From France to the United States, several high-profile kidnappings, extortion, and even torture incidents involving well-known cryptocurrency entrepreneurs and their families have shocked the entire industry.
In this context, the 'Bitcoin Family', known for their 'all in BTC' approach, recently announced by head of the family Didi Taihuttu, that they have adopted extreme yet innovative security measures to cope with the growing threats: completely abandoning hardware wallets, once hailed as one of the safest storage methods, and instead opting for a 'distributed steel plate storage' scheme that splits and disperses their private keys (mnemonic phrases) hidden across four continents. This move not only highlights the deepening security anxiety among cryptocurrency tycoons but also signals a profound evolution in the concepts and technologies of crypto asset security.
In recent months, violent crime incidents targeting cryptocurrency holders have frequently made headlines, with shocking brutality:
France: Earlier this year, David Balland, co-founder of the well-known hardware wallet manufacturer Ledger, and his partner were kidnapped and tortured, with reports stating that Balland even lost a finger in the process. Shortly thereafter, a video of the daughter of another famous cryptocurrency exchange CEO nearly being kidnapped in broad daylight went viral online, further exacerbating the community's fears. After the incident, the French government promised to strengthen security protection measures for cryptocurrency executives, including priority access to police emergency hotlines, home security patrols, and safety guidance from law enforcement agencies.
United States: An Italian tourist was kidnapped and held captive for 17 days in an apartment in Manhattan, New York, during which he suffered electric shocks, beatings, and various forms of torture. The kidnappers' goal was to force him to surrender the password to his Bitcoin wallet. Fortunately, the victim eventually escaped, and the kidnappers were arrested at the end of last month.
These bloody cases have made public advocates of Bitcoin, like the Taihuttu family, who lead a highly transparent lifestyle, potential high-risk targets. "We changed everything," Taihuttu said in a recent interview with CNBC in Phuket, Thailand. "Now, even if someone holds a gun to my head, I can only give them the small amount of cryptocurrency in my mobile wallet, and it’s not much."
As early as 2022, Taihuttu revealed that he had dispersed the family’s cryptocurrency hardware wallets across various locations around the world, from short-term rental apartments in Europe to storage rooms in South America. However, faced with increasingly severe security challenges, he believes this is still far from enough. "This is a strange world, so we are taking our own precautions—regarding wallets, we no longer use hardware wallets at all," Taihuttu stated.
The reason they abandoned hardware wallets partly stems from concerns about potential backdoors or remote access features in hardware devices. Over the past eight months, the 'Bitcoin Family' has transitioned from completely relying on hardware wallets to a hybrid system that combines digital encryption and physical storage.
The core idea of this brand new security system is 'extreme decentralization'. The specific operations are as follows:
Splitting mnemonic phrases: They divided a 24-word Bitcoin wallet mnemonic phrase into four groups, each containing six words.
Cross-continental decentralized storage: These four groups of mnemonic phrases are stored on four different continents around the world. This means that to fully restore the entire wallet, Taihuttu must travel internationally at least once, depending on which part of the mnemonic phrase is needed. However, transferring funds to this wallet address is unaffected.
Mixed storage media: The storage methods are also diverse. Some mnemonic phrases are digitally stored through a blockchain encryption platform, while others are physically engraved by him on fireproof steel plates using a hammer and letter molds, and hidden in secret locations.
Adding a personal encryption layer: To further enhance security, Taihuttu also added an additional personal encryption layer—he replaced several words in the mnemonic phrase. "You just need to remember which words you changed," he added. This way, even if an attacker manages to find most of the mnemonic fragments (for example, 18 out of 24 words), they cannot restore the complete wallet.
The Taihuttu family has stored about 65% of their crypto assets this way. He believes this method is safer than storing assets in centralized vaults like the Swiss Alps bunker used by Coinbase's Xapo, as he worries that if the company providing custody services goes bankrupt, he might not be able to retrieve his funds.
Additionally, although Taihuttu has not disclosed the family's total assets, he revealed that their target during this bull market is to reach a net worth of $100 million. In terms of asset allocation, 60% is still in Bitcoin, with the rest spread across Ethereum (ETH), Solana (SOL), Chainlink (LINK), Sui (SUI), and some investments in new companies related to artificial intelligence and education, including his own blockchain education platform.
The experiences and coping strategies of the 'Bitcoin Family' also reflect some new security trends emerging in the entire cryptocurrency industry:
Kidnap and ransom insurance (K&R Policies): With the increase in attack incidents, insurance companies have also begun to seize the opportunity to offer 'kidnap and ransom insurance' specifically tailored for cryptocurrency holders.
Multi-signature wallets: For hot wallet assets that require frequent transactions, Taihuttu uses multi-signature wallets to enhance security. This type of wallet requires multiple private keys to jointly authorize a transaction, effectively preventing single points of failure.
Multi-party computation (MPC): In addition to traditional multi-signature wallets, Taihuttu is also focusing on MPC technology. This technology breaks a single private key into multiple encrypted fragments, stored across different entities or systems, requiring multiple parties to collaborate on calculations to complete a signature, further reducing the risk of private key leakage from a single point.
Turning to decentralized exchanges (DEX): Due to concerns about data breaches on centralized platforms (such as the recent data leak incident at Coinbase), more and more users prefer to use decentralized exchanges. Taihuttu also indicated that about 80% of his transactions are currently completed on decentralized platforms.
In summary, as wealth and visibility increase, Taihuttu has started considering gradually fading from the public eye. "We’ve become a bit famous in a niche market, but this niche market is now turning into a very large market." He believes that robbery and kidnapping incidents targeting cryptocurrency holders will continue to increase.
"I love creating content, but if it’s no longer safe for my family, I will step away from the camera." Taihuttu's words articulate the heavy price that must be faced while enjoying the wealth brought by cryptocurrencies. For the entire crypto community, the story of the 'Bitcoin Family' serves as a profound reminder: in a decentralized world, true security ultimately relies on oneself. This security is not just technological but also a complete reshaping of the physical world and way of life.