A British man faced a heartbreaking loss when his girlfriend accidentally discarded a hard disk containing approximately 8,000 bitcoins back in 2013. Years of legal battles to reclaim the disk from a landfill yielded no results, highlighting the importance of safeguarding crypto assets. This story, along with four others, serves as a cautionary tale for cryptocurrency holders.
Avoiding Bitcoin Loss: The James Howells Case
The saga of James Howells, a Wales IT worker, has been a cautionary tale within the cryptocurrency community. After his hard drive containing thousands of bitcoins ended up at a landfill, Howells desperately sought access to the site, which culminated in a disappointing conclusion in January 2025.
Howells first learned about Bitcoin in 2009 and dabbled in mining before forgetting about it for several years. Following an accident with his computer, he saved the hard disk, which allegedly held the private key to his Bitcoin wallet. In 2013, his girlfriend inadvertently threw it away.
According to her, “The computer part was disposed of with other items, and I was asked to take it to the local dump.” She thought nothing of it until Howells realized that he had lost millions in Bitcoin.
After investigations, Howells deduced the hard drive was likely in the Docksway landfill, with an estimated 1.4 million tons of waste. He assembled a team to excavate the site but faced legal hurdles when the Newport City Council denied permission due to environmental concerns, highlighting the significant risks associated with landfill operations.
After suing the council for access or compensation of £495 million, the High Court dismissed the case on January 9, 2025, citing a lack of realistic prospects for success.
As the value of his lost bitcoins reached approximately $750 million, questions linger about the condition of the hard drive and its location within the massive landfill.
The Perils of Forgotten Passwords: The Stephan Thomas Case
Another notorious incident in the cryptocurrency world is the case of Stephan Thomas, a U.S. programmer who was paid in Bitcoin for creating a video on the topic back in 2011. He stored 7,002 BTC on a USB hardware wallet, IronKey, valued at around $5,300 at the time.
However, Thomas lost the paper with his password, and the IronKey is designed to permanently lock users out after ten incorrect attempts. Despite hiring cryptography experts and even trying hypnosis, he was unable to access his funds. Fortunately, Thomas later found success with cryptocurrencies at Ripple, learning from his earlier missteps.
Technology Troubles: The Peter Schiff Case
On January 19, 2020, noted economist Peter Schiff, a vocal Bitcoin skeptic, found himself locked out of his crypto wallet, claiming that his password had become invalid. He subsequently noted that although he hadn’t forgotten his password, it seemed his wallet had.
Despite receiving advice from Bitcoin supporters, Schiff remained adamant that his wallet, not he, was at fault. Initial misconceptions, including mistaking his PIN for a password, ultimately led to confusion and frustration as Schiff lost access to his crypto holdings. However, he noted that losing the bitcoins wasn’t a tragedy since they were gifted to him.
When Paper Trails Go Wrong: The Mark Frauenfelder Case
Mark Frauenfelder’s experience is a reminder of the importance of secure storage. After purchasing 7.4 BTC for $3,000 in January 2016, he stored his coins on a Trezor hardware wallet and carefully wrote down his 24-word seed phrase on an orange piece of paper. Unfortunately, while on vacation, the cleaning staff mistakenly threw the paper away.
Upon attempting to access his funds during the Bitcoin boom in 2017, Frauenfelder struggled to remember his PIN, leading to prolonged waiting periods after incorrect attempts. After extensive efforts, including consulting with an expert hacker, he finally regained access, although the ordeal underscored the necessity of securing backup data effectively.
A Lesson in Vigilance: The Alexander Halavais Case
In 2010, Alexander Halavais, a professor at Arizona State University, bought $70 worth of BTC as part of a class demonstration. Disinterested in the coins thereafter, he lost access to his wallet. Years later, amid the 2017 crypto surge, he humorously noted trying to avoid disappointing news regarding Bitcoin’s price, illustrating the unpredictable nature of cryptocurrency investments.
