Loss of Private Key Leaves LHV Bank Founder Without Access to $473M in Ethereum Stash

Jimmy Aki
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Rain Lõhmus, the founder of LHV Bank in Estonia, has been linked to the ownership of 250,000 Ether units stored in an inactive cryptocurrency wallet. However, access to the stored ETH may be unlikely due to the loss of private keys.

250,000 ETH Units Now Worth $473 Million

One of the most intriguing mysteries in the blockchain world centered around a dormant crypto wallet that contained 250,000 ETH, originally purchased for just $75,000 during Ethereum’s initial coin offering (ICO) in 2014.

However, the mystery was unraveled on October 31 when Rain Lõhmus was revealed as the owner of the stored ETH tokens in an exclusive interview with Estonia’s local media outlet, ‘ERR.News.’

During this interview, Lõhmus openly confirmed his ownership of a wallet containing 250,000 ETH, now valued at $473 million. However, he also disclosed that he had lost access to the wallet’s private keys several years ago and had not made significant efforts to recover them.

On a closing note, the LHV bank founder expressed his inability to independently regain access to his crypto wallet address, and he expressed a willingness to collaborate with others, offering a reward for assistance.

Coinbase director Conor Grogan was among the blockchain enthusiasts who drew attention to this dormant wallet.

On February 26, Grogan shared his observation on X (formerly Twitter), noting the ETH stash had surged to slightly above $400 million, marking an incredible 5333% growth from the initial $75,000 investment.

In a recent update on November 6, Grogan highlighted Lõhmus’s comments and a screenshot of his interview with ERR.News.

“One mystery solved: This address (which now holds $450M of crypto) belongs to Rain Lohmus, founder of LHV Bank. Unfortunately, he lost his keys and can’t access these 100s of millions. If you can help him recover them somehow, he’s willing to split them with you,” Gorgan wrote.

An Alarming Weakness of Blockchain Technology

In the exclusive interview, Lõhmus pointed out that a notable weakness in blockchain technology is the difficulty of password recovery. While the system’s decentralization is impressive, it doesn’t address the issue of lost passwords.

The LHV bank founder emphasized that this often-overlooked weakness should be addressed, especially if safeguarding investors’ funds and assets is a top priority.

Lõhmus shared a personal example to illustrate the challenge; he mentioned how his identity card passwords had expired, and he was able to renew them through the police department. However, a similar process isn’t feasible for retrieving stored crypto assets.

The loss of private keys and the subsequent inability to recover stored assets represents a significant weakness in blockchain technology.

Private keys are the cryptographic keys that enable individuals to access their stored digital assets and execute transactions on the blockchain.

When these keys are lost, stolen, or compromised, the stored assets become automatically irretrievable. This issue poses several substantial challenges to the adoption and use of blockchain technology.

Could ‘Ledger Recover’ Provide a Sustainable Solution?

Popular hardware company Ledger launched a cloud-based private key recovery tool called ‘Ledger Recover’ on October 24.

The wallet firm collaborated with Coincover, a renowned blockchain security firm, to design Ledger Recover, which aims to enable crypto asset holders to have an entry point to recover their Secret Recovery Phrase (SRP.)

Although the product is relatively new, it will be available to residents of the United States, Canada, the United Kingdom, and the European Union (EU).

The prospects of ledger Recover are beyond doubt impressive and can solve the identified weakness highlighted by Lõhmus.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.