A new study by Oobit has shed light on a pressing issue in the crypto space: human error is leading to a significant number of asset losses.
The study found that 35% of cryptocurrency holders have lost access to their wallets or accounts at some point, with forgotten passwords or login failures being the main cause (33%). Lost seed phrases and failed two-factor authentication were also major contributors (21% and 20%, respectively).
External factors such as platform bankruptcies accounted for a smaller but still significant proportion of losses (16%).
The financial impact was substantial, with over one-third of users never recovering their funds. In fact, more than one in ten users reported losing over $5,000 in a single event.
The study highlights the need for greater emphasis on education and security measures to prevent these types of losses. Oobit recommends that holders trial their wallet recovery processes, spread holdings across different wallet types, use password managers, and ensure physical backups of seed phrases and 2FA access codes.