Any cryptocurrency user might wonder at some point or another what happens if he loses access to his crypto wallet or if his crypto assets get stolen or hacked. Is there a way to recover lost or stolen cryptocurrency?
In our “Fun Crypto Facts” article, we mentioned the case of James Howell, a UK man that threw away by mistake his hard drive containing quite a hefty amount of Bitcoins. He tried to recover his lost Bitcoins by petitioning his municipality to allow him to dig through a landfill in search of the Bitcoin wallet, but his request was denied. His unfortunate case shows us that digital currencies can be lost forever if cryptocurrency holders don’t take precautions.
Here’s to hoping you never encounter such a problem, but just in case you ever lose access to your crypto assets, we’ve prepared a list of tips and tricks that will help you with the critical task of recovering lost cryptocurrencies.
Common causes for lost cryptocurrency
First, let’s check the most common reasons people can lose their digital assets:
- Forgotten passwords: this is the main reason for lost access to your private keys and digital wallet
- Misplaced hard drives: hardware wallets can be lost or stolen if you are not extra careful with them
- Failed transactions: sending coins to the wrong wallet address
- Scams or hacks: stolen cryptocurrencies are almost impossible to recover, so beware of suspicious activity
If you ever encounter one of these issues, you should know what can be done to salvage your virtual currencies.
Recovering forgotten passwords
To access your crypto wallet, you must use your private keys. A private key is somewhat similar to your credit card’s PIN. If you forget this password, you get locked out of your wallet, but there is a way to recover it.
Make sure you write down the seed phrase or recovery phrase that you receive during the initial set-up of your crypto wallet. Seed phrases usually contain between 12 to 24 randomly generated words and can save the day in case you lose your private keys. However, if you don’t remember the seed phrase either, you can kiss your money goodbye. The best thing you can do to secure your funds is to write down these potential passwords and store them in a place where only you have access.
Check for deleted files
If you’ve deleted your crypto files by mistake, you can check the Recycle Bin for the missing files. Even if you have already emptied the trash bin, all is not lost. Deleted files don’t disappear immediately from your computer, so you still have a chance to locate your lost coins by performing a scan of your entire hard drive. With a bit of luck, you’ll be able to find all the lost bitcoins or any other cryptocurrencies you own. Once you’re in possession of the recovered data, make sure to store it safely on your device so you don’t have to go through this process again in the future.
Contact the cryptocurrency exchange
If you use a well-known crypto exchange to trade your digital assets, you might be able to contact them and require their assistance. If your case is not singular and they had several clients experience the same issue, they will most likely try to recover assets on behalf of their customers. However, you must be aware that these exchanges cannot guarantee the total recovery of your lost cryptocurrencies, as the government does not insure these virtual assets.
Hire a recovery company
Several recovery companies, or cryptohunters, can help you seek your lost or stolen coins. They have specialized software engineers that claim to be able to recover lost private keys, lost Bitcoin, and damaged or deleted wallets.
These companies work with both cryptocurrency holders and law enforcement agencies to recover misplaced passwords, stolen coins, or any virtual assets considered lost. They charge a flat fee, so if you’re willing to pay for the chance of recovering your assets, this is a viable option.
A famous saying goes, “ Prevention is better than cure.” It applies in the case of cryptocurrency as well, as the best way to recover your lost coins is never to lose them. Although there are several ways to recover your assets, none of them are foolproof and can’t guarantee complete retrieval. Just to be on the safe side, use a cold storage wallet, store your private keys physically and be wary of who you share them with.
Another famous quote says, “ With great power comes great responsibility.” Well, with great crypto-assets comes the great responsibility of their security.
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