Crypto Wallet Recovery Becoming a Booming Business

One of cryptocurrency’s chief selling points is that it can often be much safer and more anonymous than traditional banking. With all sorts of protections and barriers against theft and fraud that you do not even see within the world of major financial institutions, there is a case to be made for the storage of cryptocurrency being inherently safer than traditional banking. This increased security is undoubtedly great for the consumer, but it can be a double-edged sword when passwords and other critical pieces of account information are lost.

As cryptocurrency’s reach grows both in the United States and around the world, the business behind helping those who are locked out of vaults where the currency is stored does too. Crypto wallet recovery firms, as they are known, assist people in retrieving funds that they—for any number of reasons—may have lost access to. Unlike traditional banking, where you entrust your money with a company like Wells Fargo, the safe storage of cryptocurrency is something that is left entirely in the hands of the person who owns the funds. In essence, owners of cryptocurrencies who do not wish to leave their funds with exchanges like Coinbase are required to serve as their own banks.

Increased Fraud is Driving People Away from Exchanges

Thanks to a number of high-profile fraud cases over the last few years, crypto investors are growing increasingly wary about handing their Bitcoin and Ethereum over to a third party. Just this past year, one of the world’s biggest exchanges, FTX, went bust after it was discovered that the company was partaking in all sorts of unscrupulous activities, leaving the crypto they were tasked with protecting at risk. In the end, FTX went out of business and its founder Sam Bankman-Fried went (or is going) to prison.

What is often not talked about however is the tens of millions of dollars that were lost in the process. The dust is still settling, but in a matter of days people who had trusted their money with FTX were no longer able to access their accounts. To this day there are thousands of depositors who are still left wondering when or if they will ever see their money returned.

How and Where Funds are Being Stored, and the Problems Presented

One alternative to storing your crypto assets with a company like FTX or Coinbase is to take them offline entirely, out of the eyes of fraudsters. You can do this by way of local software storage on your computer (think files and folders saved to your desktop) or local hardware storage (think putting your cryptocurrency onto a USB drive that can be carried around in your pocket). Either of these two storage methods are safe, but require passwords and two-factor authentication anytime the funds are accessed. This is another protection against fraud because if the physical device storing your crypto is lost or misplaced, the funds cannot be accessed by simply plugging the device into a computer.

Unfortunately for a lot of people, the “seed phrases” and passwords needed to access locally stored crypto funds are often lost, leaving the owner of the cryptocurrency stuck and unable to access their funds. It is within situations like these where companies like German-based ReWallet are called into action. Using all sorts of advanced computing methods, these companies attempt to reunite customers with their locked crypto assets. These types of businesses have been around almost as long as cryptocurrencies have, but their popularity and utility only seems to grow. With crypto assets growing in value and reaching a broader, more global audience it stands to reason that this industry will grow too.