In 2025, cryptocurrency technology continues to evolve, but the problem of losing wallet passwords and seed phrases persists. Especially when losing access to wallets containing major assets like Bitcoin (BTC), it can lead to irreversible losses, requiring special caution.
According to the cryptocurrency security company Ledger, as of early 2025, an estimated 3.7 million Bitcoins, approximately 17% of the total supply, have been permanently lost. At current market rates, this amounts to about $37 billion (approximately 51.43 trillion won). Additionally, the FBI reported that cryptocurrency investment fraud losses reached $9.3 billion (approximately 12.927 trillion won) in 2024, reconfirming the severity of the issue. Notably, individuals over 60 comprised the majority of victims, often falling prey to 'recovery scams' and incurring additional damages.
Fortunately, not all cases are irretrievable. The possibility of asset recovery depends on the type of wallet. The first priority is to accurately identify the type of lost wallet.
In the case of a Custodial Wallet, typically provided by centralized exchanges like Binance, Kraken, and Coinbase, the platform stores the user's private key. Similar to traditional financial institutions, password reset and account recovery are possible through email verification or Know Your Customer (KYC) procedures. Losing general login information is not a critical problem.
In contrast, with a Non-Custodial Wallet like MetaMask, Trust Wallet, or Ledger hardware wallet, individuals must directly store their private keys and seed phrases. Even if the password is forgotten, the wallet can be recovered and a new password set if the seed phrase is preserved. However, if both the seed phrase and password are lost, retrieving assets is practically impossible, and the market classifies these as 'dead coins'.
Recovery scam companies are also exploiting such situations. Experts emphasize that "reliable recovery services do not demand upfront fees and should transparently share official documentation and success cases." If suspicious activities or excessive fees are encountered, it is advisable to immediately stop and seek third-party verification.
Losing a password or seed phrase does not mean immediately abandoning assets. The key is to remain calm, identify the wallet type, and proceed with normal recovery procedures. Most importantly, safely backing up and storing seed phrases is crucial. The future of cryptocurrency assets depends as much on user responsibility as on technology.
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