Key takeaways
- If you lose access to your account with a crypto provider, your crypto isn't lost. You prove who you are and get your access back.
- If you lose the private key or recovery phrase to your own wallet, nobody can help you, and the crypto is most likely gone.
- At Myntkaup you log in with Icelandic electronic ID or the Auðkenni app, so if you lose your phone you need new electronic ID.
- Be wary of anyone offering to recover lost crypto for a fee. The police warn against such offers.
Contents
It makes all the difference whether you have lost access to an account with a provider or lost the key to your own wallet. Access to an account with a CustodianCustodianA company that holds crypto and the keys to it on behalf of customers, such as a licensed crypto exchange. can usually be restored by proving who you are. A lost private keyPrivate keyA secret number that proves you own the crypto in your wallet. Whoever holds the private key controls the crypto. or recovery phraseSeed phraseA list of 12 or 24 words that backs up every key in your wallet, so whoever has the words can restore the wallet and take the crypto. can't be recovered by anyone.
This article explains the difference, what to do in each case and how to avoid getting into trouble in the first place.
Two kinds of access
Think of the difference between your online bank and a safe. If you can't get into your online bank, you contact the bank, prove who you are and get your access back. Your money was never at risk. If you lose the only key to a safe that nobody else can open, the contents are locked away for good.
- An account with a custodian is like the online bank. The provider holds the crypto and knows who owns it. The login is just the way in.
- Self-custodySelf-custodyHolding the private keys to your crypto in your own wallet, so nobody else controls it but all the responsibility for the keys is yours. is like the safe. The private key is the only key, and the BlockchainBlockchainA public ledger where transactions are grouped into blocks, each linked to the one before, so past records can't be altered without it showing. doesn't know who you are.
The difference is explained in more detail in Custodial or self-custody: who holds your crypto?
If you lose access to an account with a provider
Your crypto is still in the account. You just need to get back in. That is possible because a regulated provider knows its customers: it carried out know-your-customer checksKnow your customer (KYC)A legally required check in which a company confirms who its customer is and what the business relationship is for, including with ID. when you opened the account. The way back in is to prove who you are.
At Myntkaup
At Myntkaup, you log in with Icelandic electronic ID (rafræn skilríki) or the Auðkenni app. If you lose your phone, the main task is therefore to get new electronic ID:
- Have your SIM card blocked. Contact your mobile provider. If a mobile provider closes a phone number with active electronic ID on its SIM card, the electronic ID is revoked automatically. You can also have it revoked through Auðkenni or at a registration point.
- Get new electronic ID. With a new SIM card, you activate electronic ID at a registration point, for example at a bank. Bring your phone and valid photo ID. You can activate the Auðkenni app on a new phone yourself with a valid Icelandic passport or ID card and a phone with NFC, or at a registration point.
- Log in again. Install the Myntkaup app on your new phone and log in with your new electronic ID. If anything doesn't work, you can contact Myntkaup at myntkaup@myntkaup.is or through the contact form.
Every withdrawal at Myntkaup is confirmed with your PIN in the app and by email. That is why it matters to protect both your phone and your email.
At other providers
Many foreign providers use an email address, a password and two-factor authenticationTwo-factor authentication (2FA)A login that needs two different proofs of who you are, such as a password and a code from an app, so a stolen password isn't enough.. If you lose access, for example because your authenticator app was on the lost phone, a recovery process follows. You send in ID, sometimes a selfie as well, and wait for a review. That can take days or weeks. Only use the help pages on the provider's official website, because scammers set up fake support pages.
If you lose the key to your own wallet
Here the situation is different. Behind the wallet there is no provider, no account and no name. Whoever holds the private key controls the crypto, and if nobody has it, nobody can move it.
What exactly you have lost still matters:
| You lost | You still have | Where that leaves you |
|---|---|---|
| Your phone or device | The recovery phrase | You restore the wallet on a new device using the phrase. |
| The recovery phrase | A working wallet | Create a new wallet, write down the new phrase and move the crypto across straight away. |
| Both the device and the phrase | Nothing | The crypto is most likely lost. |
If you forget the PIN to a hardware walletHardware walletA small device that keeps private keys offline and signs transactions inside the device, so the keys never reach your computer or phone., many such devices wipe themselves after a few wrong attempts. With the recovery phrase, though, you can restore the wallet on a new device.
Nobody can work out a private key from a wallet addressWallet addressA string of letters and numbers you give out to receive crypto, much like a bank account number.. That is exactly the CryptographyCryptographyMathematical methods that protect information and prove who sent it, forming the basis of security in crypto. that keeps crypto secure, and it is also what makes lost keys impossible to find. Read more about private keys and recovery phrases.
Beware of "recovery services"
People who have lost crypto are a prime target for scammers. They get in touch, often on social media, and offer to recover the crypto for a fee. Some claim to be lawyers or to work with the police or other authorities.
The FBI has warned about fake law firms that offer victims of crypto scams help recovering their money and demand payment up front. The Icelandic police in the capital region have also warned that scammers call people back offering to "help with recovery". That is a continuation of the same scam.
Warning signs include:
- They contact you first.
- They ask for a fee up front.
- They ask for your recovery phrase, your private key or access to your computer, for example through AnyDesk or screen sharing.
- They promise to get your money back.
The police don't charge a fee for investigating a crime. If you have been scammed, contact your bank straight away and report it to the police. Read about common crypto scams.
How to prevent problems
An account with a provider
- Keep your electronic ID active and remember your PIN. Know how to revoke it if you lose your phone.
- Protect your email with a strong password and two-factor authentication, because confirmations and notifications go there.
- Lock your phone with a PIN or fingerprint.
- Watch out for PhishingPhishingA scam where criminals pretend to be a trusted company or authority to get you to hand over passwords, card details or your seed phrase. and SIM swapsSIM swapWhen a scammer gets your phone number moved to a new SIM card so they receive your SMS codes and can break into your accounts.. Only log in through the official app or website.
- Never share your login, PIN or codes with anyone, including people who say they work for the provider.
You will find more tips in How to protect your crypto account.
Your own wallet
- Write the recovery phrase down on paper, or stamp it into a metal plate, as soon as you create the wallet. Keep it in two secure places.
- Never photograph the phrase, and don't store it on your phone, in email or in cloud storage.
- Test the recovery with a small amount before you put more into the wallet.
- Note which wallet you use and whether you use an extra passphrase.
- Think about your heirs. Read Crypto and inheritance.
Frequently asked questions
Can the provider I bought from recover crypto in my own wallet?
No. Once the crypto is in your own wallet, the provider has no control over it. It knows where it sent the crypto, but it doesn't have the key to your wallet.
Is my crypto lost if I lose my phone?
Not if it is held with a custodian, or if you have the recovery phrase for your own wallet. Your crypto isn't stored on the phone itself. It is recorded on the blockchain, and the phone is just a way to reach it.
What should I do if someone has seen my recovery phrase?
Create a new wallet with a new recovery phrase and move your crypto there straight away. Whoever has the phrase can empty the wallet at any time, and the transaction can't be reversed.
Closing thoughts
Start by asking: is the crypto with a provider or in your own wallet? Access to an account with a provider can be restored by proving who you are. A lost recovery phrase for your own wallet can't be recovered.
So the preparation is different. If you use a provider, keep your electronic ID and email secure. If you have your own wallet, keep your recovery phrase safe. And trust nobody who promises to get lost crypto back.
