Case files: real failures, real lessons
People learn most from other people's mistakes. This page now covers 69 documented incidents and legal developments (20 added on 24 October 2026). Each case links to the original reporting or disclosure so you can read the evidence yourself.
Weak randomness
Milk Sad (bx seed, CVE-2023-39910)
32-bit time-seeded Mersenne Twister in Libbitcoin Explorer; wallets drained.
Trust Wallet browser extension (CVE-2023-31290)
Only ~4 billion possible seeds; exploited before and after disclosure.
Randstorm (BitcoinJS 2011–2015)
Browser-generated wallets from that era may be crackable.
COLDCARD firmware weak RNG (2021–2026)
What happened: A build error made affected COLDCARD firmware generate seeds from a non-cryptographic software generator instead of the hardware TRNG (about 40 bits effective on Mk2/Mk3, about 72 bits on Mk4/Q/Mk5, by Coinkite's estimate). Attackers regenerated seeds offline. Seeds with at least 50 private dice rolls added were, per Coinkite, not at risk from this bug alone.
What failed: A single maker's RNG path, unnoticed in published code for five years.
Coinkite advisory · Block Engineering
Cake Wallet weak Bitcoin seeds
What happened: Affected versions used a non-secure generator for Bitcoin wallets; the vendor told users to migrate in May 2021. Researchers later showed the wallets could be recomputed quickly and found funds still in them years afterwards.
What failed: A general-purpose PRNG, and users who never migrated.
Milk Sad update #9 · update #10
Trust Wallet iOS (CVE-2024-23660)
What happened: Early iOS builds used test-only random functions with a small, time-seeded state; researchers linked them to the July 2023 thefts.
Android SecureRandom flaw
What happened: Improperly initialised randomness on Android led to repeated signature nonces, exposing private keys in Bitcoin wallet apps.
Bitcoin.org alert · Android Developers Blog
Blockchain.info repeated R-values
What happened: A randomness fault in the web wallet produced signatures from which private keys could be computed; a white-hat swept about 255 BTC from 1,019 exposed addresses before thieves could.
Debian OpenSSL predictable keys (CVE-2008-0166)
What happened: A packaging change removed most entropy from Debian's OpenSSL, making keys from nearly two years enumerable.
Ethercombing: guessable Ethereum keys and a "blockchain bandit" (2019)
732 private keys in predictable parts of the key space had been used in 49,060 transactions; an automated "bandit" account held 37,926 ETH (about $54m) in January 2018, and test funds were swept within seconds.
Biased signature nonces: hundreds of Bitcoin keys computed (2019)
Partly predictable ECDSA nonces let researchers compute hundreds of Bitcoin private keys from public signatures using lattice attacks.
Breitner & Heninger, IACR ePrint 2019/023
Vendor & supply-chain incidents
Ledger customer data breach
~1m emails and ~272,000 names/addresses leaked; years of phishing followed. No seeds or funds were exposed by the breach itself.
Ledger Recover controversy
Announcement that firmware could export encrypted seed shards to third parties provoked a backlash and launch delay.
Ledger Connect Kit supply-chain attack
A phished ex-employee's NPM access let attackers inject a wallet drainer into many dApps.
Trust Wallet browser extension 2.68: a backdoored official update
What happened: On 24 December 2025 a malicious version 2.68 of the Trust Wallet Chrome extension was published to the Chrome Web Store outside Trust Wallet's normal release process. It collected wallet data from users who opened and logged in to it between 24 and 26 December, and attackers drained the wallets. Trust Wallet identified 2,520 affected addresses and about $8.5m in assets linked to 17 attacker addresses, said it would reimburse victims, and told users to update to version 2.69. It linked the attack to the "Sha1-Hulud" npm supply-chain worm of November 2025, which it believes exposed its source code and Chrome Web Store API key. The mobile app was not affected.
What failed: The official update channel itself: a build pushed automatically to users' browsers with a leaked publishing key.
Trust Wallet incident update · SecurityWeek
Counterfeit Trezor with pre-generated seeds
What happened: A "Model T" bought through a classifieds website had a replacement chip with read protection off and modified firmware. It handed out one of 20 pre-generated seeds and reduced any passphrase to its first character, leaving about 1,280 combinations. Funds were taken a month after the first deposit.
What failed: An unofficial seller; intact holographic stickers gave false comfort.
Physical seed extraction from Trezor One/Model T
Trezor support-portal breach used for seed phishing
What happened: Unauthorised access to Trezor's third-party support ticketing system exposed names and emails of up to 66,000 people who had contacted support since December 2021. The attacker emailed 41 users asking for their recovery seeds, claiming they were needed for firmware validation (BleepingComputer); Trezor said no seeds were disclosed.
What failed: A supplier's system, not the devices.
Locked-out owner recovers a Trezor via a firmware flaw
What happened: Journalist Mark Frauenfelder forgot the PIN to a Trezor holding bitcoin. Saleem Rashid, then 15, used a firmware-update weakness to read the PIN and key from memory. Trezor fixed the flaw in 2017.
wallet.fail at 35C3
What happened: Researchers demonstrated glitching attacks on Trezor's STM32 chip and a bootloader bypass on the Ledger Nano S's non-secure microcontroller. Ledger responded that the secure element kept the seed and PIN out of reach; both makers issued firmware updates.
Hardware hacker recovers about $2m from a Trezor One
What happened: Joe Grand glitched an old-firmware Trezor One to recover the forgotten PIN and seed for an owner who had lost access. Trezor called it an outdated exploit fixed in 2017, though the chip weakness remains.
Ledger Donjon bypasses Trezor Safe 3 authenticity checks
What happened: Using voltage glitching on a disassembled device, Donjon bypassed the Safe 3's authenticity and firmware hash checks — a supply-chain risk. No PIN or private key was extracted; the issue cannot be fixed by firmware and Safe 5 was not affected.
Laser fault injection on Trezor Safe 7's TROPIC01 chip
What happened: Ledger Donjon used a lab laser on a decapsulated TROPIC01 to run unsigned firmware on the chip. Trezor says this removes one of three layers protecting the PIN, cannot create persistent tampered devices and needs no owner action; Tropic Square plans a hardware fix.
Bybit / Safe{Wallet} — ~$1.5bn
A compromised developer machine let attackers alter the Safe{Wallet} interface so multisig signers approved a malicious transaction. Attributed by the FBI to North Korea.
Slope wallet logged seeds
iCloud backups of MetaMask vaults
Loss: passwords, people, fire and water
Two guesses left on an IronKey
A programmer reported having two password attempts left on an encrypted drive holding keys to 7,002 BTC.
QuadrigaCX
After the founder's death, access was initially blamed on lost keys; the OSC found most of the shortfall stemmed from fraud.
Fires and floods
Owners report paper seeds lost to floods and fires; in one well-known post, a device survived a house fire that destroyed the paper backup.
Flood · Fire · Fire (device + paper)
Lost passphrases
Wallet-maker forums regularly feature users who cannot reproduce a BIP39 passphrase (capitalisation, spaces, keyboard layout).
Wrench attacks
Digital copies of seeds
SparkCat: apps that read seed phrases from your photos
What happened: Kaspersky found malicious code in apps on both official stores. The apps asked for photo-gallery access, used on-device text recognition (OCR) to find screenshots containing recovery-phrase keywords, and uploaded them. Infected Google Play apps had over 242,000 downloads before removal.
What failed: A screenshot or photo of a seed phrase, usually taken 'just for now', sat in the camera roll.
Kaspersky Securelist · BleepingComputer
LastPass vault breach linked to wallet drains
What happened: Attackers stole encrypted LastPass vault backups in 2022. Researchers then linked a string of thefts (over $35m by 2023) to victims who had stored seed phrases in those vaults; in 2025 US federal investigators tied a ~$150m theft to the same pattern. LastPass said it had no conclusive evidence of a link.
What failed: Seed phrases were stored in a cloud password manager. Encryption bought time, but weaker master passwords could be cracked offline.
Krebs on Security (2023) · Krebs on Security (2025)
Atomic Wallet: more than $100m drained
What happened: Over 5,000 users of the Atomic Wallet software wallet were drained in one campaign that Elliptic and the FBI attributed to North Korea's Lazarus Group. The root cause has not been fully disclosed.
What failed: Large balances were held in a hot, closed-source software wallet.
A Bitcoin Core developer's coins taken after his computers were compromised
What happened: On 1 January 2023 Luke Dashjr, a long-time Bitcoin Core contributor, said his bitcoin — roughly $3.6m — was "basically all gone", that his PGP key had been compromised and that all his computers were compromised. He said the affected wallets included hot wallets and ones he believed were cold. In November 2022 he had reported that someone had accessed his Linux server. Analysts later described three Linux backdoors from the attack; how the attackers first got in was not confirmed.
What failed: Keys that were on, or reachable from, computers the attackers controlled — even for an expert.
Ars Technica · Magnet Forensics analysis
Phishing, fake devices and social engineering
Tampered 'replacement' Ledger devices sent by post
What happened: Using addresses from the 2020 Ledger data leak, criminals posted modified Nano X devices with a fake letter from Ledger's CEO saying a replacement was needed. A hidden USB flash drive inside prompted users to install malware and enter their 24 words.
What failed: The victim trusted an unsolicited device and typed a seed into a computer.
BleepingComputer · Kraken Security Labs
Electrum fake-update phishing
What happened: Attackers ran malicious Electrum servers that showed fake 'please update' error messages when users broadcast transactions. The 'update' was malware; reports put losses above 770 BTC.
What failed: Users followed an in-app link instead of downloading only from the official site.
Malwarebytes Labs · Schneier on Security
Coinbase support-agent data theft
What happened: Criminals bribed overseas support contractors to copy customer data (names, addresses, partial ID numbers, balances) for about 69,000 users, then phoned victims posing as Coinbase. Coinbase said no passwords or private keys were taken and estimated costs of $180m–$400m.
What failed: Leaked personal data made the impersonation calls convincing.
Address poisoning: $68m sent to a look-alike address
What happened: A victim copied a recipient address from transaction history that an attacker had 'poisoned' with a look-alike, and sent 1,155 WBTC (about $68m). Unusually, after negotiations the attacker returned nearly all of it.
What failed: Only the first and last few characters of the address were checked.
Printed letters asking Ledger and Trezor owners for their recovery phrase
What happened: In April 2025 Ledger confirmed that letters bearing its logo, which told owners to complete a "mandatory wallet validation" by scanning a QR code and entering their 24-word recovery phrase, were a scam. BleepingComputer later reported similar Trezor- and Ledger-themed letters, including a Ledger "Transaction Check" letter with a 15 October 2025 deadline, leading to phishing pages that ask for a 12-, 20- or 24-word phrase. Ledger says it almost never sends physical mail and will never ask for the phrase. The person who posted the April letter suspected the addresses came from Ledger's 2020 customer-data leak; Ledger did not confirm this.
What failed: An official-looking letter, a deadline and a QR code moved the victim from paper to a phishing site.
Ledger: physical mail phishing · BleepingComputer · The Block (April 2025)
A second-hand Ledger that came with the seller's recovery phrase
What happened: A Reddit user bought a Ledger Nano second-hand on eBay. The seller had supplied a recovery phrase of his own instead of letting the device generate one. The buyer used it, and about a week later found his XRP, Litecoin and Dash — over £25,000 by his account — had been moved out. Ledger warns that a genuine device creates its recovery phrase during set-up and never arrives with one pre-filled.
What failed: A marketplace purchase and a recovery phrase the buyer did not create himself.
Cointelegraph · Ledger: pre-seeded device scams · Ledger: second-hand device warning
Inferno Drainer: phishing sites that only needed you to click "approve"
What happened: Group-IB describes Inferno Drainer as a "scam-as-a-service" used on more than 16,000 phishing domains that copied over 100 crypto brands, often promising free airdrops or compensation. Victims connected their wallets and approved transactions that sent their assets to criminals; the developers took 20% and the affiliates who brought victims 80%. ScamSniffer estimated at least $80m was stolen. The operators announced a shutdown in November 2023.
What failed: Victims signed transactions on sites they reached through social media. No seed phrase was needed.
$230m+ taken from one person by fake Google and Gemini "support" (ringleader pleaded guilty)
What happened: Prosecutors allege that on 18–19 August 2024 a group contacted a creditor of the failed lender Genesis in Washington, D.C., posing as Google and Gemini support staff, persuaded him to reset two-factor authentication and obtained the means to move over 4,100 BTC (then worth over $230m). Investigators traced the coins through mixers and exchanges; about $9m was frozen and $500,000 returned within weeks, according to CoinDesk. Malone Lam and Jeandiel Serrano were arrested in September 2024; a superseding indictment in April 2025 added further defendants. Update: on 8 September 2026 Malone Lam pleaded guilty in the US District Court for the District of Columbia to one count of RICO conspiracy. According to the Department of Justice, the enterprise stole and laundered more than $245m through social engineering and occasional home break-ins between October 2023 and May 2025; a status hearing was set for 8 December 2026. Charges against other defendants remain allegations unless and until proven; check the court docket for the current position.
What is alleged to have failed: A convincing support call led the victim to change his own security settings and hand over access.
Indictment, US v. Lam (D.D.C.) · CourtListener docket 1:24-cr-00417 · DOJ: guilty plea (8 September 2026) · CoinDesk
Fake "crypto recovery" law firms target people who have already lost money
What happened: The FBI has repeatedly warned that people posing as lawyers contact crypto scam victims, claim to work with the FBI, the CFPB or other agencies, and ask for identity documents, bank details and upfront "fees" or "back taxes" to recover the money. Between February 2023 and February 2024, victims reported losses of over $9.9m to these fictitious firms. The August 2025 update added red flags: invented regulators, knowing the exact amounts of earlier losses, WhatsApp "secrecy" groups, and fake foreign bank sites.
What failed: Victims trusted someone who appeared to offer an official route back to their money.
FBI/IC3 PSA I-062424 (June 2024) · FBI/IC3 PSA I-081325 (August 2025)
Physical coercion
Kidnapping of Ledger co-founder David Balland
What happened: Balland and his partner were kidnapped from their home; the kidnappers demanded crypto and mutilated his hand. Police freed both. French police investigated a series of similar crypto-related kidnappings during 2025.
What failed: Publicly known wealth and a known home address.
Reuters · TRM Labs on wrench attacks
Greater Manchester gang jailed for kidnapping a man for his crypto
What happened: Between January and November 2023 a gang repeatedly held a vulnerable man against his will, attacked him with weapons including machetes and a pistol, drugged him with morphine and demanded cryptocurrency. He told police he had paid them more than £100,000 and that they had visited his home and threatened him. Officers found him at an address in Irlam on 2 December after an anonymous tip-off; DNA on cigarette ends and phone data linked the men to the scene. At Manchester Crown Court seven men received sentences totalling more than 75 years, two of them 20 years each.
What failed: The attackers knew he held crypto and where he lived, and he alone could move it when threatened.
BBC News · Manchester Evening News
Manhattan townhouse kidnapping over a bitcoin password (charges pending)
What happened: Prosecutors allege that two crypto investors, John Woeltz and William Duplessie, held a 28-year-old Italian man in a SoHo townhouse from 6 May 2025 and assaulted him repeatedly over about 17 days to get his bitcoin password. He escaped on 23 May and asked a traffic officer for help. Both men were indicted on charges including kidnapping and assault and pleaded not guilty; their lawyers dispute the prosecution's account. In January 2026 the judge refused to dismiss the indictments and ordered hearings on how evidence was obtained.
What is alleged: According to prosecutors, the accused and the alleged victim knew each other through crypto investing. These are allegations, not findings.
Reuters (June 2025) · ABC News · LA Magazine (January 2026)
Paris abductions targeting crypto entrepreneurs' families
What happened: On 1 May 2025 the father of a crypto entrepreneur was forced into a van on a Paris street and held for about two days in a house south of the city; the kidnappers severed one of his fingers and sent video to his son while demanding a ransom of millions of euros. Police freed him and arrested seven suspects. On 13 May a masked gang tried to snatch the daughter of Pierre Noizat, chief executive of the French exchange Paymium, in broad daylight; passers-by fought them off. Reuters counted at least three such attacks in France in a few months, including the January kidnapping of Ledger co-founder David Balland.
What failed: Attackers targeted relatives, not the holders themselves, because the family's wealth was publicly associated with crypto.
Reuters (16 May 2025) · Reuters (14 May 2025) · AP News · CNN
Home-invasion crew used email hacking and surveillance to pick targets
What happened: A crew led by Remy Ra St Felix stole more than $3.5m through SIM swapping and violent home invasions in Florida, Texas and North Carolina, holding victims at gunpoint and binding them with cable ties. In Durham, North Carolina, accomplices first broke into the couple's email account and watched the house for several days; during the invasion the man was forced to open his computer and exchange account, and over $150,000 in crypto was taken remotely. St Felix was arrested on his way to another home invasion on Long Island. A federal jury convicted him in June 2024 and he was sentenced to 47 years; 12 men were sentenced in total.
What failed: Phone numbers and email accounts gave the crew both the information to choose targets and the access to drain exchange accounts.
US Department of Justice (13 September 2024) · ABC11
Custodians and exchanges
QuadrigaCX: the founder died — but that was not the main loss
What happened: On 14 January 2019 the Canadian crypto exchange QuadrigaCX announced that its co-founder and chief executive, Gerald Cotten, had died in India the previous month. By 5 February it had stopped operating and sought creditor protection, owing over 76,000 clients a combined C$215m; the bankruptcy trustee recovered or identified only C$46m. It was widely assumed that most of the loss came from keys lost with Cotten. Ontario Securities Commission staff concluded otherwise: most of the C$169m shortfall came from his fraud — about C$115m from trading against clients with fictitious balances under aliases, covered with other clients' deposits, "in effect, operating a Ponzi scheme" — and he also misappropriated client assets.
What failed: One person controlled client assets with no oversight or internal controls, and there were no proper financial records.
OSC staff review (June 2020) · OSC news release (staff views, not findings of a tribunal or court)
Mt. Gox: a decade to repay
What happened: The then-largest bitcoin exchange collapsed after losing hundreds of thousands of BTC. Creditors began receiving partial repayments only in July 2024.
What failed: Customers held claims on an exchange, not their own keys.
Celsius: "Earn" deposits ruled the company's property
What happened: The crypto lender Celsius filed for bankruptcy in July 2022. Judge Martin Glenn held that, under Celsius's terms of use, crypto deposited in its interest-paying Earn accounts — about 600,000 accounts worth about $4.2 billion on 10 July 2022 — became Celsius's property and so part of the bankruptcy estate, leaving account holders as unsecured creditors (some defences were reserved for later). The FCA cites Celsius as owing users $4.7 billion when it filed.
What failed: Users had handed legal title to the platform in exchange for yield, often without realising it.
US Bankruptcy Court (S.D.N.Y.) · TechCrunch · FCA
Voyager's false "FDIC insured" claims
What happened: The US Federal Trade Commission says Voyager Digital told people that money deposited through its app was FDIC-insured. It was never an insured bank and FDIC insurance does not cover crypto; when Voyager failed, customers were locked out and lost money. Under a proposed settlement the companies agreed to a permanent ban on offering products that could be used to deposit, exchange, invest or withdraw assets.
FTX bankruptcy
What happened: Customer assets were commingled and misused, and withdrawals stopped within days. A plan approved in October 2024 repaid most customers in cash based on November 2022 values, so they missed later price rises.
What failed: Customers had concentrated their trust in an offshore custodian.
More loss stories
James Howells: a hard drive in a landfill
What happened: A Welsh IT worker says a hard drive holding the key to about 8,000 BTC went to Newport landfill. In January 2025 the High Court struck out his claim against the council, the Court of Appeal refused permission to appeal, and by August 2025 he said he had given up.
What failed: There was a single copy on one electronic device, with no paper or metal backup.
High Court judgment (BAILII) · BBC
Mircea Popescu: a fortune possibly lost on death
What happened: The early bitcoin investor drowned in Costa Rica. Press reports speculated that his (unverified) holdings may never move, because it was unclear whether anyone had his keys.
What failed: There was no known inheritance plan.
Matthew Mellon: crypto missing from the will
What happened: The banking heir died holding XRP valued in court documents at roughly $193m, about 97% of his estate. His outdated will did not mention it, and he reportedly kept keys on devices under other people's names in several places. His estate's lawyers got control through Ripple, an option most coins do not offer. A pre-death agreement limited daily sales, the value swung around 30% within weeks, and the estate paid about $60m in federal estate tax in late 2020.
What failed: An outdated will, undocumented key locations, no cash for tax, and a lock-up agreement.
Daily Dot (court records, 2021)
Clifton Collins: wallet codes hidden in a fishing-rod case
What happened: Collins, who was jailed for growing cannabis, bought bitcoin in 2011–2012. In 2017 he moved about 6,000 BTC into 12 wallets of 500 each, printed the codes on a single sheet of A4 paper and hid it in the aluminium cap of a fishing-rod case at a rented house in Co Galway. After his arrest the house was broken into and cleared on behalf of the landlord; items went to a dump and the case was never found. The Criminal Assets Bureau seized the wallets but could not open them (Irish Times, February 2020). In 2026 the bureau, with help from Europol's cybercrime centre, recovered three batches of 500 BTC by July; The Block reported about 4,500 BTC still in nine untouched wallets.
What failed: One paper copy, hidden where nobody else knew to look, in a property he did not control.
Irish Times (2020) · Irish Times (2024) · The Block (July 2026)
A family who had to give up on a relative's bitcoin
What happened: A wills, trusts and estates lawyer at Harrison Clark Rickerbys told BBC News that his firm had a case in which a client's family believed, after his death, that he had owned bitcoin, but had to drop it because they did not have the information to access it. He said about two in ten of his clients then held crypto, and that clients are reluctant to give access details to their lawyers.
What failed: Nobody had a record of what existed or how to reach it.
A lost wallet password recovered because its generator was predictable
What happened: A European owner (called "Michael" by WIRED) protected a software wallet holding 43.6 BTC with a 20-character password made by the RoboForm password manager. He kept it only in a TrueCrypt-encrypted file, which became corrupted. Hardware hacker Joe Grand and a colleague found that the RoboForm version he used, and later versions until 2015, based "random" passwords on the computer's clock. By making the program believe it was 2013 again they regenerated the password, created on 15 May 2013 at 16:10:40 GMT. RoboForm's maker told WIRED the issue was fixed in version 7.9.14 (10 June 2015).
What failed: The only copy of the password was in one encrypted file, and the password generator was predictable.
WIRED · Grand Idea Studio: technical notes
Parity multisig library: 513,774 ETH frozen by one shared contract
What happened: Hundreds of Parity multisig wallets relied on one shared library contract for their logic. A user who found that the library itself had never been initialised made himself its owner and then triggered its self-destruct function. Parity's post-mortem says 587 wallets holding 513,774.16 ETH became frozen: not stolen, but impossible to move. A proposal to restore the code by changing Ethereum (EIP-999) did not gain consensus, so the funds remain stuck.
What failed: Every wallet depended on a single piece of shared code that nobody had locked down; the owners' own keys were safe but useless.
Parity: post-mortem · EIP-999 · CoinDesk (2017)
Storage locations: fire, vaults and boxes
California wildfires: backups in the fire zone
What happened: After the Los Angeles-area wildfires, CNBC reported social media claims of bitcoin losses, including photos of metal seed plates burnt until they could not be read, and difficulties reaching keys kept in a bank safe deposit box affected by the fires. CNBC said the individual claims could not be verified. Separately, Casa's chief executive said a customer who lost a seed phrase in a fire recovered using the other keys of a multisig setup (Casa sells that service).
What failed: Copies kept where one regional disaster could reach them; reliance on a single key.
US Private Vaults: boxes seized in someone else's investigation
What happened: While investigating a Beverly Hills private vault company, the FBI seized its safe deposit boxes and "inventoried" about 700 of them. The Ninth Circuit held that this went beyond the warrant, which did not authorise a criminal search of box contents, and violated the Fourth Amendment.
What failed: Box holders' property depended on a business they did not control.
Snitko v. United States (9th Cir. 2024)
Hatton Garden Safe Deposit burglary (general)
What happened: A gang broke into a London safe deposit vault and took about £14m of jewellery and other property. Sentencing them, the judge said the burglary "stands in a class of its own". This is not a crypto case, but it shows that vaults can be breached.
What failed: A physically secure site was still attacked successfully.
Courts and the law
Legal developments that people often hope will rescue lost or inaccessible crypto, and a UK criminal case that shows how control follows whoever holds the keys.
Tulip Trading: asking Bitcoin developers to recover lost keys
What happened: Tulip Trading, a company associated with Craig Wright, said it owned bitcoin worth about $4bn (April 2021 value) at two addresses whose private keys had been lost in a hack. It sued Bitcoin developers, arguing that they owed owners fiduciary duties and should write software to move the coins to it. The High Court set aside service of the claim; the Court of Appeal allowed Tulip's appeal, holding only that the claim raised a serious issue to be tried, not that developers owe such duties. After the High Court found in a separate case in March 2024 that Wright is not Satoshi Nakamoto, Tulip discontinued the claim in April 2024.
What failed: Lost keys, and a claim that depended on developers being both able and obliged to move other people's coins.
Court of Appeal judgment [2023] EWCA Civ 83 · LexisNexis: claim discontinued · Bitcoin Legal Defense Fund (acted for developers)
The Property (Digital Assets etc) Act 2025: ownership confirmed, access not
What happened: The Act, based closely on Law Commission recommendations, says a thing (including a digital or electronic thing) is not prevented from being an object of personal property rights merely because it is neither a "thing in possession" nor a "thing in action". The Law Commission says this confirms a "third category" of personal property into which crypto-tokens can fall, and leaves the courts to develop its boundaries. It came into force the day it was passed.
What it does not do: Clearer property status helps executors, victims and courts. It does not give anyone the keys: as US digital-asset law also says, a fiduciary's rights do not require a custodian to share passwords or decrypt devices (California Probate Code §880).
legislation.gov.uk · Law Commission · California Probate Code §880
61,000 bitcoin found on devices and in a deposit box: the UK's largest crypto seizure
What happened: Zhimin Qian (also known as Yadi Zhang) ran an investment fraud in China between 2014 and 2017 with over 128,000 victims, converted part of the money into bitcoin and fled to the UK. In 2018 police seized devices from a London property she rented and a nearby safe deposit box, after lawyers approached by her assistant over a house purchase raised the alarm; together they gave access to about 61,000 BTC, accessed by police in 2021. She pleaded guilty to possessing and transferring criminal property and was sentenced at Southwark Crown Court to 11 years and 8 months; her assistant Jian Wen had earlier received 6 years and 8 months, and an accomplice 4 years and 11 months. The bitcoin is subject to civil recovery proceedings in the High Court.
What it shows: Keys kept on devices and in one box meant whoever seized those items could take control of the coins.
CPS (11 November 2025) · Sentencing remarks (Judiciary) · Reuters
Patterns across every case
| Pattern | Cases | Defence |
|---|---|---|
| Seed existed in digital form | SparkCat, LastPass, MetaMask iCloud, Slope, Dashjr 2023 | Offline paper/metal only; never photograph or type |
| Bad randomness | COLDCARD 2026, Milk Sad, Trust Wallet (extension and iOS), Cake Wallet, Randstorm, Profanity, Android 2013, Blockchain.info, Debian OpenSSL, Ethercombing 2019, biased nonces 2019 | Multi-source or verifiable device entropy, your own dice mixed in, vendor diversity; replace seeds after any advisory (compare methods) |
| Trusted a message, device or caller | Fake Ledger post, Electrum, Coinbase, Ledger leak, Trezor support portal, scam letters 2025, eBay pre-seeded Ledger, Genesis creditor 2024 (guilty plea 2026), fake recovery law firms | Verify via official channels; no one legitimate asks for your seed |
| Single point of failure | Howells, IronKey, QuadrigaCX, Popescu, Mellon, California wildfires, Clifton Collins, UK family 2020, RoboForm password | Two or more backups; multisig or Shamir; letter of instruction |
| Someone else held the keys | Mt. Gox, FTX, Quadriga, Celsius, Voyager | Self-custody or regulated, segregated custody |
| One location or institution held everything | US Private Vaults, Hatton Garden, California wildfires, Qian seizure 2018 | Split the secret across sites (layouts); tamper-evident bags |
| Physical attack on the device | Rashid 2017, wallet.fail, Kraken 2020, Joe Grand 2022, Donjon Safe 3, TROPIC01, counterfeit Trezor | Buy direct; strong passphrase; secure-element devices; see advisories |
| Official update channel compromised | Ledger Connect Kit, Trust Wallet extension 2.68 | Small balances in browser wallets; hardware wallet for savings; new seed after an incident |
| Physical coercion | Balland, Greater Manchester 2023, Manhattan 2025 (alleged), Paris 2025, St Felix crew 2022–23 | Privacy; keys in separate places; time delays (coercion) |
| Hoping a court or developer can restore access | Tulip Trading, Property (Digital Assets etc) Act 2025, Clifton Collins, fake recovery law firms | Treat loss as permanent; leave a tested recovery path |
| Shared smart-contract code failed | Parity 2017, Bybit/Safe | Widely audited contracts; test small; know what else must keep working (smart-contract wallets) |
| Blind signing | Bybit/Safe, address poisoning, Inferno Drainer | Verify full details on a hardware screen |
Last reviewed: · Educational information only — verify current details with official sources.