Crypto privacy tools serve “essential protective functions” that restore a measure of financial privacy long present in traditional finance, according to a new report from non-custodial crypto platform ChangeNOW and digital asset management platform CoinRabbit.
The report draws on data from TRM Labs, Chainalysis, RAND Corporation and the authors’ own internal research. Its central argument is that conventional public blockchains can expose users to risks that would not normally exist in bank-based financial systems.
Those risks, the authors wrote, span financial access under sanctions and authoritarian governments, corporate sovereignty as firms move onto blockchain infrastructure, and personal safety when scammers or violent criminals can inspect wallet balances and transaction histories in public.
What the report says privacy protects
On sanctions, the report argues that the heaviest costs often fall on people with the least influence over the conduct being punished. It cites Iran’s disconnection from SWIFT as an example, saying ordinary citizens lost the ability to receive foreign payments, buy imported goods and collect family remittances, while the political class retained access to alternative rails.
U.S. Treasury Secretary Scott Bessent has said Operation Economic Fury seized about $1 billion in Iranian crypto, including a single $344 million USDT freeze on Tron.
The report then turns to corporate exposure. Anyone with a company’s wallet address, it says, can reconstruct vendor relationships, payment frequency, estimated payroll and supply-chain dependencies. In a banking environment, that information would typically stay confidential. A Statista study cited in the paper found that 36% of board members worry about internal data becoming public, while the average breach costs $4.44 million.
For high-net-worth crypto holders, the risk becomes personal. Walter Barrett, CoinRabbit’s Chief Strategy & Growth Officer, said, “Public blockchain transparency lets anyone audit your net worth in real time, turning private wealth into public information.”
Wrench attacks and targeted social engineering
The paper links that visibility to so-called wrench attacks, where attackers use physical coercion rather than code exploits. CertiK counted 52 verified wrench attacks in the first half of 2026, exposing $124.1 million. That was nearly 12 times the H1 2025 figure.
France accounted for 33 of those cases. The report says breaches at France Travail and ANTS allowed attackers to connect home addresses with suspected crypto holdings. French prosecutors have since charged 88 people, including more than 10 minors.
Public blockchain transparency can also help scammers identify high-value targets. CoinRabbit’s internal research found that roughly half of surveyed high-net-worth holders had faced a targeted social-engineering attempt within three years. Another 30% said they use data-broker removal services to sever the link between their real-world identity and their on-chain activity.
Authors say enforcement leverage sits at fiat off-ramps
The report does not present privacy as an unqualified good. It describes crypto privacy as a double-edged sword and cites TRM Labs estimates that illicit crypto inflows reached $158 billion in 2025, up 145%. Chinese-language escrow and laundering networks accounted for more than $100 billion of that total.
It also cites $75 billion in losses from pig-butchering fraud between 2020 and 2024, and says 84% of verified fraud and scam inflows now move across stablecoin rails.
Even so, the authors argue that the decisive enforcement vulnerability “lies at the fiat off-ramps” where crypto turns into spendable currency, “not within the upstream transactional privacy infrastructure.”
AQ Forensics founder Albert Quehenberger made a similar point. Privacy, he said, “may increase the complexity of an investigation” but “rarely determines whether a criminal can ultimately be identified.” Attribution, in his view, usually comes from on-chain analysis, KYC records, exchange cooperation and intervention by stablecoin issuers, rather than from blockchain transparency alone.
ChangeNOW and CoinRabbit point to their own models
The report also references the companies’ own products. Its authors describe ChangeNOW’s private transfer routing and CoinRabbit’s custodial model as examples of privacy-preserving crypto architecture.
“The privacy debate starts from the wrong assumption that ordinary users must prove they have nothing to hide by exposing everything,” said Pauline Shangett, Chief Strategy Officer at ChangeNOW. She called on the crypto industry to “build systems where access is justified, targeted, and lawful, not universal by default.”