How to Recover Lost Cryptocurrency (What’s Possible and What’s Not)

We’ve all heard the stories. One lucky man bought Bitcoin when it was still pennies for a single token, but then, lost access to his wallet. Unfortunately, it happens, and sadly, there aren’t as many recovery options as you would think.

Whether or not someone will be able to recover lost cryptocurrency depends on what aspect they lost, and what they have available to help them recover access. Read on to learn more about how to recover lost cryptocurrency.

Can You Recover Lost Cryptocurrency?

If you inadvertently send your cryptocurrency to the wrong account or wallet, then it doesn’t look good for you. Same goes if you lost your password or seed phrase. Sadly, recovery options are limited in these cases, though you do have a few options depending on which aspect of access you lost.

1. If You Lost Your Seed Phrase

Those with a hardware wallet have the highest level of security for their cryptocurrency, but they also have the highest level of personal responsibility. If you lose your seed phrase, there is unfortunately very little you can do beyond attempting to guess your password.

Of course, if you are reading this article, it is likely too late. But in the future, use the tactics we propose in our article on how to safely store your seed phrase to lower the chances of you losing access to your cryptocurrency in the future.

2. Use a Password Recovery Tool

If you have your seed phrase stored in a password manager and lost access to that, then you do have the option of contacting the password management company to see if there is a way to regain access to your account. There are also tools you can use that help you regain access.

Just be sure you vet any tool before you use it, as hackers can sometimes create these tools as a trap to steal your information.

3. Contact Wallet Support

Those with a digital software wallet have chosen the less safe way to store their cryptocurrency, but at the same time, they can contact customer service in the case of a lost password or mis-sent transaction. While we can’t guarantee they will reverse a mistakenly made transaction, they can usually help you recover access to your account if you lost your seed phrase. Sadly, this isn’t an option for those using a hardware wallet and your cryptocurrency may be lost forever.

Can You Recover Stolen Cryptocurrency?

Similar to lost cryptocurrency, it can be very difficult to recover stolen cryptocurrency, but in these cases, you will at least have law enforcement on your side. While we can’t guarantee all stolen cryptocurrency will be recovered, below are some of the methods you may be able to employ to get your investment back.

1. Contact Authorities

The number one way to increase the chances of recovering stolen cryptocurrency is if you contact your local authorities or the FTC. Opening a case against malicious actors in the cryptocurrency space ensures that if they are caught in the future, you will be entitled to restitution.

Sadly, this isn’t an immediate fix, but hopefully, it does mean you will get your cryptocurrency back someday.

2. Contact Your Wallet Customer Service

While not an option for the hardware wallet people, those using a software wallet should contact customer service if they believe their cryptocurrency has been stolen. Not only can the digital wallet provider reverse fraudulent charges if they were made on their network (for settling on the blockchain later), but when a hack is proven, they are also typically able to restore stolen cryptocurrency on a temporary basis—meaning you don’t have to wait as long for your restitution.

It is important to note that blockchain transactions are not reversible. If you make a transaction on the blockchain on a non-custodial wallet like Metamask or Ledger, these transactions cannot be undone. The only reason transactions on platforms like Coinbase can sometimes be undone is that the platform settles them locally before pushing groups of transactions through to the blockchain at a later date. That being said, the longer you wait, the more unlikely it is that even a platform like Coinbase can undo your transaction.

What Happens to Someone’s Crypto When They Die?

If someone dies while holding Bitcoin in a hardware wallet, unless they have left the password behind for posterity, the Bitcoin is lose forever. This has unfortunately been the case in many circumstances, and some estimate that 5% of Bitcoin is inaccessible forever due to the owner’s death.

In light of some of these situations, many individuals set up a sort of “switch” to go off when they die, revealing the password to their friends and family via a dapp when a certain set of steps are taken. Additionally, those using a software wallet can add another name to the account to take custody when they die.

If you lost someone who you know was holding Bitcoin and they didn’t leave a seed phrase for you, you may be out of luck. But, if they utilized a software wallet like on Coinbase or Kraken, it is worth contacting the company to see if anything can be done—just don’t hold your breath.

Can You Recover Crypto in a Frozen Account?

Cryptocurrency wallets can be frozen due to perceived suspicious activity. Wallets are usually frozen by the government or law enforcement, and cannot be unfrozen until the investigation is complete.

Unfortunately, there is no easy way to unfreeze a wallet, though if you are using one on a digital platform like Binance or Kraken, you can contact customer service to see what your options are and verify that the freeze wasn’t a mistake.

Things don’t look much better for hardware wallet folks, whose assets can be frozen by the US government as well (just not as easily). In this case, you are probably better off moving on than trying to deal with the US legal system to get access to your cryptocurrency back. Sorry, we don’t have better news for you.