Possible ways to lose your crypto and how to recover them

Cryptocurrencies are the future of finance thanks to their improved network for cost efficiency and security without taking away your autonomy over your money. However, this is still far from perfect with various means to lose your cryptocurrencies. 

Losing your cryptocurrencies can range from honest mistakes to falling victim to scams. All wallets come with extra security both to be user-friendly and theft proof but there is no such thing as a perfectly safe system in such a lucrative economy. Here are ways to lose your crypto and how to recover them if possible:

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Three situations where you can lose your crypto assets

There are three possible ways to lose cryptocurrencies. One of them is physical, the second is a common mistake among newbies to the blockchain, and the last one is an outside force you should be wary of. 

All of them can be avoided by practising standard preventive measures but recovering money once you lose them in the following ways can be challenging. The first step to crypto recovery is understanding how they’re lost and here’s a brief explanation of each of them:

Lost your private keys or device

Private keys are randomly generated codes from the wallet which serve as your signature whenever you use your crypto savings. Most users don’t need to memorise it because it’s usually impersonal. MetaMask simplifies its use by using multi-layer encryption usable with the press of a button while others, like the Ledger Nano S, display it on screen. You just have to type it somewhere. 

Losing your wallet means you can’t access your private keys. This could happen either you uninstalled the wallet if it’s an app, forgot your login information, or someone stole your hardware wallet/mobile device with the app installed. 

Sent your crypto to the wrong address

The blockchain networks’ peer-to-peer (P2P) payment system is simple and easy to use. Just type in the recipient’s wallet address but doing it manually is ill-advised. You should always use copy+paste or scan a QR code if you can help it because there are plenty of ways to mistype a long line of randomly generated characters. 

Gamdom is cautious of this and that’s why the deposit page comes with plenty of warnings as well as reminders. They have also partnered with many payment method providers for a safer and more efficient transaction. 

A mistyped wallet address can send your assets away to an unintended recipient. Crypto asset recovery can vary between difficult to impossible depending on who received it. The best case scenario is it goes to someone’s wallet and the worst case is if the wallet address is not owned by anyone. All decentralised assets are erased from circulation.

Falling for online scams or letting a virus into your device

Cryptocurrencies are targeted by thieves worldwide and they have already developed various ways to scam investors. The most common of which is a phishing scam where they develop a fake version of a website and hope that you input your login information on them. Others perform digital heist on exchanges by exploiting the security weaknesses of centralised trading platforms. 

There are authorities enforcing laws protecting digital asset traders or helping in attempts to prevent or recover stolen crypto. However, they can’t help with theft caused by computer viruses. The ones you should look out for are malware because they can steal your wallet information and use it to log in your account. 

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Preventive measures and/or solutions to each case

Crypto investors look out for each other in looking for countermeasures against losing assets. That’s traders will always reach out to warn others of danger signs they can identify. Likewise, communities were built to create a trust-worthy network of connections on the internet for helping each other out. 

Many of these traders have compiled simple fixes to the aforementioned ways to lose your crypto. If you ever find yourself in those situations, then you can try the following solutions:

Send all your crypto on a new wallet

Migrate all of your savings to a new wallet if you feel like your account information, like private keys, is compromised. Simply use the P2P system by sending all of your savings to your other wallet address to do the job. 

If you simply lost the private keys, then you can’t transfer your assets. This is where you use the seed phrase that was generated on your account’s creation to transfer it to another wallet. Doing so will generate new private keys that you can safekeep. This also works for stolen hardware wallets or smartphones.

Contact the receiving party and negotiate

If your crypto was sent to a different recipient as a mistake, then you should contact them and ask for the assets back. You will have to pay the transaction cost to prevent loss for the other person who was just caught in this case by mistake. Unfortunately, some users will insist on keeping the asset and believe that there won’t be any consequences given that they didn’t technically steal it. 

You will have to negotiate for the return of your assets or consult authorities and the community of traders for stolen crypto recovery options. Blockchains make tracking stolen crypto easy because ownership history is written on the assets. These can help you prove where your assets went. Traders will help investigate your case and blacklist users who are proven guilty of unfairness.

Bolster your virus detection systems 

Installing a powerful antivirus is all you need to avoid malware, trojan, and ransomware from invading your system. If you don’t have one yet, then you should always check your security systems if it detects any suspicious behaviour in your computer or smartphone. 

Check your account or your transaction history frequently and set up a two-factor authentication for logging in. Any transactions made in your account without your knowledge are done by someone else using your login information. The only way to recover stolen cryptocurrency via virus attacks is to track the thieves using the asset's ownership history. You can either negotiate for your money’s return or prepare to take legal action against them.

Practice preventive measures 

Using an antivirus is a good first step to keeping your crypto savings safe. Another is to stay within a circle of traders you trust for most of your buying and selling deals. If you want to be ahead of an investment opportunity, then take the time to know more about the people offering them. Crypto recovery can be quite a difficult task, thus, prevention is the best means to keep your assets in your wallet. 

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Words: Clarence Clarke