The Hackers Hunting Billions in Lost Bitcoins

Rhonda Kampert invested in cryptocurrencies well before it became fashionable. She bought six bitcoins in 2013, when each was still priced at $80.

“I used to listen to radio shows and they started talking about cryptocurrencies and bitcoins, so I got interested,” she says. “At that time, it was all very complicated, but I managed to understand the process and buy.”

Rhonda, who lives in the US state of Illinois, spent some of her digital money in the year after the purchase and then ended up forgetting about it.

But when she saw headlines in late 2017 announcing that the individual value of bitcoin had reached nearly $20,000, she rushed to her computer to redeem what she had invested. But there was a problem. Rhonda couldn’t remember some login details to access her bitcoin wallet — a computer program that stores a series of secret numbers or private keys.

“I had a piece of paper with my password, but I had no idea what my wallet ID was,” he says. “It was horrible. I tried everything for months, but I couldn’t get in. So I gave up.”

treasure hunters

In mid-April last year, bitcoin’s value reached more than $50,000 — more than 600 times what Rhonda paid eight years earlier.

With an added incentive to find her bitcoins, she began researching how to do so on the internet and found Chris and Charlie Brooks, a father and son who work as cryptocurrency hunters.

“After chatting with them online for a while, I felt confident to pass on the login details I still remembered. Then I started to wait,” he says.

“Eventually we had a video call and I watched the process. Chris opened my wallet and the bitcoins were there. I felt so relieved!”

Rhonda’s wallet, with three and a half cryptocurrencies, was worth, at the time, US$ 175 thousand (R$ 912 thousand). “I gave the combined 20% to Chris and Charlie. Then the first thing I did was withdraw $10,000 to help pay for my daughter Megan’s college,” she says.

She says she’s storing the rest in a hardware wallet — a device similar to a thumb drive that stores Rhonda’s login details offline. The login password to access the new hardware wallet is stored in its memory.

Rhonda expects bitcoins, which are now worth $43,000 each, to rise in value again. She considers these savings as a retirement fund, to use when she stops working as a stock and cryptocurrency trader.

billions lost

There are several Rhondas out there who need help recovering their cryptocurrencies. An estimate by Chainanalysis, which researches cryptocurrencies, suggests that of the 18.9 million bitcoins in circulation, 3.7 million have been lost by their owners.

And in the decentralized world of cryptocurrencies, there are no custodians of the system — so if you forget your wallet login details, there aren’t many alternatives to redeem the money.

Chris and Charlie estimate that services like the ones they offer, which use computers to try hundreds of thousands of possible IDs and passwords, could recover 2.5% of lost bitcoins — a figure that reaches $3.9 billion. .3 billion).

Chris started his business, Crypto Asset Recovery, in 2017, but stopped and focused on other projects for a while. It was in conversation with his son Charlie just over a year ago that he decided to revive Crypto Asster Recovery.

“We had the idea to restart the business, so in the weeks that followed, we bought several computer servers and reactivated everything,” says Charlie, who is now 20 years old.

Working from the family’s beach house in New Hampshire, England, father and son began receiving more than 100 emails and calls a day from potential customers when the price of bitcoin last rose in November 2021.

Now that the values ​​have dropped a little, they are trying to advance the queue of orders placed at that time. Business is doing so well that Charlie no longer intends to finish his computer science college. However, the duo jokes that they spend all their time in eternal frustration.

With the remnants of memory and confusing paperwork from their customers, which hints at possible login details, they only succeed in the task in 30% of cases.

Even so, they are usually disappointed with what they find. “In most cases, we can’t identify what’s inside the wallet, so we have to trust what the customer says and believe that the value that’s really there justifies all our search work”, explains Charlie.

“We had a case over the summer where a person told us he had 12 bitcoins. We acted professionally in front of him, but we were jumping for joy at the potential payout we would get. We spent like 60 computer server hours, another 10 hours with the client trying to identify clues”, he says.

“Then, on a video call, when we opened the wallet, it was completely empty.”

Chris and Charlie say the only time a customer underestimated the number of bitcoins in their wallet was when they found the largest amount — $280,000 worth of bitcoins.

Last year, they say they recovered millions, in total, in lost bitcoins.

growing market

Father and son are part of a growing industry of ethical hackers, who use their expertise to help people recover lost cryptocurrencies.

Another professional in this industry is Joe Grand, who started hacking when he was a teenager.

He recently made a viral YouTube video about how he hacked a hardware wallet containing $2 million worth of cryptocurrency called Theta.

Joe spent months of preparation and practice, in his office in Portland, Oregon, USA, trying to get into other hardware wallets until he came up with a method of his own.

He was finally able to access the lost cryptocurrencies by combining two previously discovered vulnerabilities in the wallet in question. “When you get into a cryptocurrency wallet or break a security system, it feels like magic no matter how many times you do it,” says Joe.

Joe’s day-to-day job is teaching manufacturers to ensure their products are safe from hacker attacks, but he is now starting a cryptocurrency wallet redemption business.