In short
The famous cases aren’t about hacks. They’re about one person holding everything in their head, a device with no backup, heirs who didn’t know what existed, and the discovery that a court can give you the legal right to coins without giving you any way to move them. Each is a planning failure with a cheap fix.
Estimates of bitcoin that can never be spent again run from 2.3 to 3.7 million coins, a tenth or more of all that will ever exist (Ledger Academy, citing Chainalysis). Most of it was lost quietly. A few cases made the news, and they’re worth knowing because they show the failure modes in their purest form.
QuadrigaCX: the keys in one head, and worse
Gerald Cotten ran Canada’s largest crypto exchange and died suddenly in India in December 2018, aged 30. The company said he alone held the keys to the cold wallets; by the regulator’s later count about C$215 million was owed to 76,000 customers. The Ontario Securities Commission’s review, published in 2020, found something else: most of the crypto hadn’t been in cold storage at all. Cotten had traded customers’ money under fake accounts, lost around C$115 million, and covered withdrawals with new deposits (OSC report, CBC). The trustee recovered about C$46 million.
The lesson: “only I know the keys” is a red flag, in a company and in a family. A setup nobody else can verify is a setup nobody else can inherit, and sometimes a setup that hides a problem. Multiple keys, held by multiple people, with the configuration written down: multisig inheritance.
Matthew Mellon: heirs who didn’t know what there was
The banking heir Matthew Mellon put about $2 million into XRP in 2017 and died in Mexico in April 2018, when the holding was reportedly worth hundreds of millions; later reports valued the estate’s XRP at around $193 million (Daily Dot). Reports that he’d scattered the keys on devices held under other people’s names were never confirmed. What the record does show is that the estate took about three years to turn the XRP into money, working through Ripple and the courts rather than a letter of instruction, and paid a large tax bill along the way.
The lesson: an inventory and a letter would have saved years. The estate had the legal right from day one; it lacked the map. What your heirs need.
Stefan Thomas: a password and ten guesses
The programmer Stefan Thomas received 7,002 bitcoin in 2011 and stored the keys on an IronKey, an encrypted USB drive that erases itself after ten wrong passwords. He lost the paper with the password and, by 2021, had two guesses left (NYT). In 2023 a security firm said it had found a way to crack the device and offered to help; Thomas declined, having already promised a share to two other teams (Wired, Protos). As far as the public record goes, the coins are still locked.
The lesson: a device is not a backup. A seed phrase on metal in two places survives a dead drive, a forgotten password and a house fire; a single encrypted gadget survives none of them. Where to keep seed phrases. And for heirs: the limited-guess rule is exactly why you don’t try PINs.
James Howells: the hard drive in the landfill
In 2013 James Howells’s then partner threw out a hard drive holding the keys to about 8,000 bitcoin (some reports say 7,500). It went to a landfill in Newport, Wales. He spent a decade asking the council for permission to dig; in January 2025 the High Court threw out his £495 million claim as having “no realistic prospect of succeeding”, and in March 2025 the Court of Appeal refused to hear it (The Block, Local Government Lawyer). The landfill is closing, and in August 2025 he said he had given up on the drive (Wikipedia).
The lesson: the same as Thomas, from the other side. Nobody can inherit a hard drive. A written seed would have made the drive irrelevant.
Mircea Popescu: a fortune that may or may not exist
The Romanian bitcoin figure Mircea Popescu drowned in Costa Rica in June 2021. He had claimed to hold enormous amounts of bitcoin; nobody has been able to confirm whether he did, where the keys were or who, if anyone, can reach them (Fox 5). The estate’s position has not been publicly reported.
The lesson: if nobody knows what exists, there’s nothing to inherit, whether the coins are there or not. Tell someone that a plan exists and where it is; the amounts can stay private. The letter of instruction.
The pattern
Four of the five cases involve a single person, a single secret and no second copy. The fifth involves heirs who had every legal right and no map. None of them would have been prevented by a better lawyer; all of them would have been prevented by an afternoon’s work:
- An inventory that says what exists.
- A seed backup that isn’t a device, kept in two places.
- A second person who can act: a keyholder, a service or a timelocked key.
- A letter that a tired, non-technical person could follow.
- A rehearsal, so you know they could.
Successful inheritances don’t make the news, which is the point. The planning section is how yours becomes one of them.