FOLLOW US

German authorities seized over $60 million worth of Bitcoin (BTC) from a fraudster. However, the Bitcoin fraudster refused to give them the password to open the private keys. The fraudster had been sentenced to two years in jail. He installed malicious software that uses his victims' computers for Bitcoin mining.

The Bitcoin fraudster has already served his term in jail. However, he refused to provide the authorities with the password. Meanwhile, German prosecutors failed to access the wallet containing over 1,700 due to complicated security protection.

In an interview with Reuters on Friday, prosecutor Sebastian Murer said: “We asked him but he didn’t say. Perhaps he doesn’t know.”

Bitcoin has high-security encryption and to access BTC, individuals would need a private key. The private keys are made up of extremely complicated secret numbers that allow the private exchange of cryptocurrencies. Nevertheless, the problem with private keys is that their owners are obliged to remember them.

An IronKey stores the digital wallet and Bitcoin holders need to remember the password to access it. That being said, if they forget the password, they won’t be able to retrieve it as Bitcoin doesn’t have any password retrieval procedure.

When the fraudster was jailed for taking advantage of victims’ computer processors to mine Bitcoin – the price of the cryptocurrency was far less valuable than it is now. The digital token skyrocketed in December 2020 and reached an all-time high of $42,000 in January. The Bitcoin fortune stored in the fraudster’s digital wallet was worth $80 million then. However, the German prosecutors claimed that the fraudster won’t be able to access them.

Bitcoin Private Keys are Becoming a Problem

In 2011, Stefan Thomas — a San Francisco-based software developer lost access key to his Bitcoin. Thomas had 7,002 Bitcoin, worth $662 million at the current BTC price. Thomas acquired the cryptocurrency after he animated a video explaining how Bitcoin works. A crypto enthusiast rewarded him with 7,000 Bitcoin back then.

Nevertheless, due to the extreme complexity of IronKeys, Thomas couldn’t retrieve his password. Additionally, the IronKey only gives its holder 10 password guesses before encrypting the Bitcoin permanently.

Meanwhile, James Howells — a British man accidentally threw away a hard disk filled with his Bitcoin (BTC) 7 years ago and had lost $280 million worth of Bitcoin.

That being said, fraudsters are within their legal rights to refuse to share their password with authorities, which would ultimately provide access to the wallets. Meanwhile, Bitcoin holders who lose their passwords will consequently lose a fortune that they won’t be able to recover.