Dan Reich and a friend lost the password for a crypto wallet worth millions, the Verge reported. Reich found a hacker known as Kingpin who helped him unlock the hardware wallet. Millions of bitcoin have been lost to owners because of forgotten passwords or lost wallets. Sign up here for our daily newsletter, 10 Things Before the Opening Bell. A hired hacker helped Dan Reich recover millions worth of cryptocurrency from a hardware wallet he’d lost the password for years before.
In a story titled “Cracking a $2 million crypto wallet,” the Verge reported that four years ago, Reich and a friend used $50,000 worth of bitcoin to purchase a new cryptocurrency called Theta tokens, worth 21 cents each, and later stored them in a Trezor hardware wallet.
Reich wanted to cash out after the token sunk to a fourth of its value but he and his friend forgot the pin, the Verge said. They made 12 guesses then quit, not wanting to get too close to the 16th guess, at which point the wallet would automatically erase all its data. Reich wrote off the loss until 2020 when the token started surging, making the wallet worth millions, the Verge reported.
Then, he started looking for hackers.
In February 2021, when the wallet was worth $2.5 million, he discovered Joe Grand, an electrical engineer and hardware hacker known as Kingpin who advises companies on how to protect their products.
Reich wrote about his story on a blog, and the two hired a film crew to document the hacking. In the video description, Grand said he thought the hacking would be a “slam dunk.”
“Little did I realize the project would turn into a roller coaster ride with over three months of experimentation, failures, successes, and heart-stopping moments,” he wrote. “In this case, the stakes were higher than normal: I only had one chance to get it right.”
Finally in May he was ready to deploy a computer program that would unlock the wallet. Reich flew to Portland to give the wallet to Grand. And within several hours, he did it.
“Yes! Yes!” Reich said after the wallet was successfully hacked.
Owners have lost nearly 4 million bitcoins thanks to unrecoverable wallets or accidentally throwing the hardware away, among other things, according to an estimate from Chainalysis. Grand, part of a hardware and software wallet-hacking company called offspec.io, has continued searching for new people to help break into their crypto wallets, the Verge said.
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