Outside Source
A girlfriend of the British man accidentally threw away his hard disk with roughly 8,000 bitcoins on it in 2013. The years of legal battle for the right to retrieve the disk from the waste dump resulted in nothing. These and four other stories remind us to treat our crypto assets with caution.
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How not to dump bitcoins: James Howells case
The story about the Wales IT worker whose hard disk with thousands of bitcoins got to the landfill was circulating in the media for years. All this time, he was vainly trying to gain access to the waste dump where his treasures are lying at peace, and it seems that on January 9, 2025, the case concluded in a dismal finale.
James Howells, a Newport local, learned about Bitcoin around 2009 and tried mining for a while before totally forgetting about cryptocurrency for several years. At some point, he spilled liquids on his computer, so he dismantled it, saving his hard disk, though. The disk allegedly contains a private key to Howells’ Bitcoin wallet. In 2013, his then-girlfriend, Halfina Eddy-Evans, accidentally tossed a hard drive away.
Here’s what Eddy-Evans told Daily Mail in an exclusive interview:
“The computer part had been disposed of in a black sack along with other unwanted belongings, and he begged me to take it away, saying, ‘There’s a bag of rubbish here to be taken to the tip.’
I had no idea what was in it but I reluctantly dropped it off at the local tip on the way home from going on the school run… I thought he should be running his errands, not me, but I did it to help out… Losing it was not my fault.”
After a while, Howells realized that the about 8,000 BTC he had mined in the past cost millions. He tried to find a precious disk but failed. After a sort of investigation, he came to the conclusion that the hard drive with a private key on it was somewhere in the Docksway landfill in Wales. The junk weight on this landfill is estimated at over 1.4 million tons.
Howells, accompanied by a team of specialists, made plans to excavate the site. Although Howells planned to pay for the operation himself and donate 25% or 30% to the Newport City Council and local residents, officials refused him permission, citing environmental impact. The search of the site could have resulted in fires and the release of poisonous gases.
Howells sued Newport City Council. In his ultimatum, he demanded permission to search the waste dump or a £495 million compensation. On January 9, 2025, it was reported that the High Court declined the case as having no realistic prospects for success.
At that time, the total cost of Howells’ bitcoins was estimated at around $750 million. The possibility of the site search being successful is questionable, though. What are the chances that the hard disk in question is still operative? What are the chances that it is located in the Docksway landfill? Does this disk even exist? Why did Howells and Halfina split? So many questions.
IronKey on my back: the Stephan Thomas case
The case of Stephan Thomas is another well-known nightmare in the crypto community. A U.S. programmer of German descent, he was paid in BTC for creating the animated educational video about Bitcoin in 2011. Thomas decided to store a reasonable reward of 7,002 BTC (!) on a USB hardware wallet, IronKey (around $5.3k at the time).
Hardware wallets are widely recognized as the safest way to store bitcoins. The problem is Thomas lost the paper with the password on, and IronKey is programmed to lock the coins forever after ten incorrect password entries. The multi-millionaire, on paper at least, Thomas did everything he could and even more to crack the freaking code. He hired cryptography experts. He even resorted to hypnosis. After eight of ten attempts, nothing helped. Thankfully, in 2012, Thomas started to work in Ripple and has gotten lots of crypto since then without repeating his old mistakes.
Crypto wallet forgets the password: Peter Schiff case
On Jan. 19, 2020, an avid Bitcoin critic, gold maximalist, and Europac chief economist Peter Schiff took to X to share a screenshot from his crypto wallet app, showing that he cannot enter the correct password. The caption he added read that his password was no longer valid and the wallet “got corrupted somehow.”
He concluded that owning Bitcoin was a bad idea. After a number of Bitcoin enthusiasts provided him with advice or offered him help. When Professional Capital Management CEO and well-known Bitcoin maxi Anthony Pompliano assumed Schiff simply forgot his password, the latter added that it was not he who forgot the password, but his wallet.
When another tech CEO, Rahul Sood, asked Schiff to provide his seed phrase, Schiff said he never had one. Several days later, Schiff admitted that he mistook his PIN for a password but insisted that he still could not access his coins. That’s not something strange considering the fact that the economist didn’t save his password or seed phrase.
Happily enough, he said that it was not a tragedy for him as the bitcoins in his wallet were gifted, and his plan was to HODL until Bitcoin sinks. Quick reminder: when the story took place, Bitcoin was traded at around $8,600. This story tells us that no matter how high your position in the financial world is if you use crypto apps improperly, you can lose your coins.
Orange paper: Mark Frauenfelder case
One of the early writers for the Wired publication and co-founder of BoingBoing, Mark Frauenfelder, shared his story in Wired. He spent $3,000 buying 7.4 BTC in January 2016. When the BTC price grew substantially, he wisely decided to move his coins to a hardware wallet by Trezor. He wrote down the 24-word seed phrase on an orange piece of paper, created an easy-to-remember PIN code, and added it next to the seed phrase.
While Frauenfelder was on vacation, the cleaning service employee threw the orange paper away. In 2017, when the BTC price skyrocketed, Mark decided to move his coins, but it turned out he forgot a PIN code.
One of the Trezor features is that each incorrectly entered PIN doubles the waiting time before the next attempt. Soon, Mark found himself facing an hour-long waiting period. That’s when he decided to contact the support team. However, without a seed phrase written on the same lost paper, they couldn’t do anything. It took Frauenfelder four hours of a hypnosis session to recall the PIN. An incorrect one. The following attempts resulted in an 18-hour-long wallet block.
As a professional from the IT sphere, Frauenfelder was already acquainted with high-profile fintech experts. One of them advised Mark to ask for help from Saleem Rashid, a prodigy hacker. Rashid managed to hack Trezor and retrieve a PIN and a 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.
Professor learned the lesson: Alexander Halavais case
Alexander Halavais, a professor of social technology at Arizona State University, bought $70 worth of BTC in front of the class of graduates as a part of the educational process in 2010. He didn’t think about these coins much at that time, and therefore he lost access to his wallet.
Seven years later, in an interview amidst the 2017 crypto craze, Halavais joked that he is trying to ignore the news about the current Bitcoin price so as not to get upset.
This article first appeared at crypto.news
