A British man's girlfriend threw away his hard drive with around 8,000 bitcoins on it in 2013. These and four other stories remind us to handle our crypto assets carefully.
How not to put down bitcoins: the case of James Howells
The story of the Welsh IT worker whose hard drive containing thousands of bitcoins ended up in landfill circulated in the media for years. All this time, he was trying in vain to get to the garbage dump where his treasures lie at rest, and it seems that on January 9, 2025, the case ended at sad ending.
Newport local James Howells learned about Bitcoin around 2009 and tried mining for a while before completely forgetting about cryptocurrency for several years. At some point, he spilled liquids on his computer, so he dismantled it, saving his hard drive, however. The disk is said to contain a private key for Howells' Bitcoin wallet. In 2013, his girlfriend at the time, Halfina Eddy-Evans, accidentally threw away a hard drive.
This is Eddy-Evans told Daily Mail in an exclusive interview:
“The computer part was brought out in a black bag with other unwanted items, and he begged me to take it away, saying, 'There's a rubbish bag here to take to the tip.'
I didn't know what it was but unfortunately I dropped it off at the local point on the way home from school… it wasn't my fault.”
After a while, Howells realized that the approximately 8,000 BTC he had mined in the past was worth millions. He tried to find a precious disc but failed. After some sort of investigation, he came to the conclusion that the hard drive with a private key was somewhere in the Docksway landfill in Wales. The waste weight in this landfill is estimated to be over 1.4 million tonnes.
Howells, along with a team of experts, made plans to excavate the site. Although Howells intended to pay for the work himself and donate 25% or 30% to Newport City Council and local residents, officials refused him permission, citing environmental impacts. Fires and toxic gases may have been released when the site was searched.
Howells sued Newport City Council. In his finale, he asked for permission to inspect the waste dump or compensation of £495m. On January 9, 2025, he was there reported that the High Court rejected the case as there was no prospect of success.
At that time, the total cost of Howells' bitcoins was estimated to be around $750 million. It is doubtful, however, that the field research is likely to be successful. What are the chances that that hard drive is still working? What are the chances that it is located in Docksway Landfill? Does this disc even exist? Why did Howells and Halfina divorce? So many questions.
IronKey on my back: the case of Stephan Thomas
The case of Stephan Thomas is another famous nightmare in the crypto community. A programmer from the United States of German descent, he was paid in BTC to create the animation educational video about Bitcoin in 2011. Thomas decided to store a reasonable reward of 7,002 BTC (!) on a USB hardware wallet, IronKey (about $5.3k at the time).
Hardware wallets are widely recognized as the safest way to store bitcoins. The problem is that Thomas lost the paper with the password on it, and IronKey is programmed to lock the coins forever after ten wrong password entries. The multi-millionaire, at least on paper, Thomas did everything he could and even more to break the freaking code. He hired cryptography experts. He even went into hypnosis. After eight out of ten attempts, nothing helped. Fortunately, in 2012, Thomas started working in Ripple and has acquired a lot of crypto since then without repeating his old mistakes.
Crypto wallet forgets the password: the case of Peter Schiff
On January 19, 2020, avid Bitcoin critic, gold holder, and Europac chief economist Peter Schiff took to X to share a screenshot from his crypto wallet app, showing that he can't get the correct password put in. The caption he said said his password was no longer valid and the wallet was “corrupted somehow.”
He decided that owning Bitcoin was a bad idea. After several Bitcoin enthusiasts advised him or offered him help. When the CEO of Professional Capital Management and famous Bitcoin maxi Anthony Pompliano assumed that Schiff forgot his password, the latter said that it was not he who forgot the password, but his wallet.
When another tech CEO, Rahul Sood, asked Schiff for his seed phrase, Schiff said he never had one. A few days later, Schiff admitted he mistook his PIN for a password but insisted he still couldn't access his coin. That's not surprising since the economist didn't save his password or seed phrase.
Fortunately, he said that it was not a tragedy for him because the bitcoins in his store were given away, and his plan was to HODL until Bitcoin sank. A quick reminder: when the story happened, Bitcoin was trading at around $8,600. This story tells us that no matter how high your position is in the financial world if you use crypto apps inappropriately, you can lose your coins.
Orange paper: the case of Mark Frauenfelder
As one of the early writers for the publication Wired and co-founder of BoingBoing, Mark Frauenfelder, share his story in Wired. He spent $3,000 buying 7.4 BTC in January 2016. When the price of BTC skyrocketed, he decided to transfer his coins to a hardware wallet with Trezor. He wrote down the 24-word seed phrase on a piece of orange paper, created an easy-to-remember PIN code, and placed it next to the seed phrase.
While Frauenfelder was on vacation, the cleaning service worker threw away the orange paper. In 2017, when the price of BTC went up, Mark decided to transfer his coins, but it turned out that he forgot the PIN code.
One of the features of Trezor is that each incorrectly entered PIN doubles the waiting time before the next attempt. Soon, Mark found himself facing an hour-long wait. That's when he decided to contact the support team. However, without a seed phrase written on the same lost paper, they could do nothing. It took Frauenfelder four hours of hypnosis to get the PIN back. One wrong. The following attempts resulted in an 18-hour long wallet block.
As a professional from the IT field, Frauenfelder was already familiar with high-profile fintech experts. One of them advised Mark to seek help from Saleem Rashid, a prodigy hacker. Rashid managed to hack Trezor and recover PIN and seed phrase. Please note that the hacked version of the wallet is no longer supported, and later versions are considered safe. Please do your best to store backup data safely.
The Professor learned the lesson: the case of Alasdair Halavais
Alexander Halavais, a professor of social technology at Arizona State University, bought $70 worth of BTC in front of a graduating class as part of the educational process in 2010. He didn't think much of these coins at the time, so he lost access to his wallet.
Seven years later, in an interview amid the crypto craze of 2017, Halavais joked that he tries to ignore the news about the current Bitcoin price so as not to disturb him.
