#115 Untangling: Losing All Your Bitcoin...?

In this episode, Alec shares a harrowing story of Bitcoin loss, digital vulnerability, and eventual recovery.

After his phone was stolen during a night out, Alec discovered that his Coinbase account had been compromised—resulting in the theft of his entire Bitcoin holdings.

This candid conversation explores what went wrong, how crypto thefts are becoming more sophisticated, and what lessons can be drawn to protect yourself in the age of digital finance.

Key highlights:

• How the Theft Happened and the Shocking Aftermath: Alec recounts the moment his phone was snatched in London and how, within minutes, the thieves accessed his Coinbase app and drained his Bitcoin. Despite biometric protections and multi-factor authentication, the attackers managed to bypass security and execute transactions. Alec describes the emotional toll, the helplessness of watching the funds move in real time, and the feeling of transparency without control as he tracked the Bitcoin theft on-chain.
• The Role of Custodians and Coinbase’s Response: The episode highlights a surprising silver lining: Coinbase investigated the incident thoroughly and refunded the stolen funds after six weeks. Alec praises the company’s approach, transparency, and user support—contrasting it with other platforms where victims often receive no compensation. This part of the conversation reignites the debate between self-custody and trusted custodians, underscoring the importance of platforms that provide recourse in the event of security failures.
• Crypto Security, Recovery Challenges, and Broader Implications: Jack and Alec delve into how the immaturity of police investigations, social engineering, and growing AI-enabled attacks complicate crypto security. They explore how blockchain’s immutability—one of its greatest strengths—can also work against victims. They also reflect on the limitations of traditional law enforcement when it comes to investigating digital theft, and how Alec's experience may push more crypto holders toward regulated platforms, especially those that can offer a chance at recovery.

This episode is a powerful reminder that Bitcoin and blockchain may be secure technologies, but the people using them remain vulnerable.

Alec's experience offers a cautionary tale and a call for better security practices, awareness, and institutional protections. Whether you store your tokens on-chain or with a custodian, being proactive about your security is non-negotiable.

And sometimes, as Alec learned, choosing the right platform—like Coinbase—can make all the difference between loss and recovery.

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This episode is sponsored by the VeChain foundation. Learn more about VeBetterDAO here:

https://vebetterdao.org/

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Learn more about Web3 at:

https://untanglingweb3.com/

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Untangling Web3 is brought to you by hosts Jack Davies and Alec Burns, with music by Daniel Paigge. Got a question or topic suggestion? Send us an email at [email protected].

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The views we express here are our own, and do not represent the views of our employers. Nothing discussed or stated in the show should be considered advice.