Vitalik Buterin has stressed the need for better wallet security to prevent cryptocurrency loss, not just theft.
In a recent exchange on social media, the Ethereum co-founder noted that many users lose crypto due to forgotten passwords, software failures, lost devices, or failure to back up data before hardware upgrades. Unlike theft, these incidents often go unreported because victims feel ashamed or see no one to blame.
Reminder: there’s also plenty of people who have lost huge amounts of crypto to *loss* rather than theft.
Software bug, forgotten password, lost device, paper wallet burned down in LA fire, upgraded device without backing up data …. lots of ways for that to happen.
Because…
— vitalik.eth (@VitalikButerin) February 28, 2025
Buterin pointed out that because these incidents do not involve an attacker, victims often remain silent, either due to shame or because there is no one to hold accountable. However, he stressed that loss is a widespread issue that should be treated with the same urgency as theft.
One of the most striking examples of this kind of crypto loss is James Howells, who misplaced a hard drive containing 8,000 Bitcoins in 2013. The device, now worth hundreds of millions, was mistakenly discarded by his ex-partner and is believed to be buried in a landfill owned by Newport City Council in the United Kingdom.
Howells has failed to retrieve it despite his legal efforts. With the landfill set to close within two years, he is considering an appeal or an investor-backed purchase of the site. His pursuit of the lost Bitcoin has become a relentless mission.
To address these kinds of situations, Buterin reiterated his advocacy for social recovery wallets, which provide a safety net against accidental losses. He urged the crypto industry to prioritize the development of robust security mechanisms that can prevent irreversible asset loss and ensure better protection for users.
This call for stronger security in the crypto industry has also been echoed by HTX Global Advisor Justin Sun. Following a $1.5 billion exchange hack, he warned that hackers are shifting from targeting hot wallets to exploiting vulnerabilities in multi-signature systems. Sun urged exchanges to adopt more advanced security measures to counter these evolving threats.
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