KeychainX CEO: Over $100 Billion in Cryptocurrencies Lost

With the number of wallets, blockchains, and users increasing every month in this industry, security concerns become a top priority for users.

We spoke to Robert Rhodin, CEO of crypto wallet recovery service KeychainX, about an unexpected discovery that has turned into a coveted solution for crypto wallet users.

Tell us about Keychainx. When and why did you decide to launch this company and what kind of services do you offer?

This started in 2017 when a friend's Ledger stopped working and they asked me to help them recover 150 ETH.

After browsing different forums, I realized that this is not just my friend's problem, nor is it just a Ledger problem. People are clueless about the Ethereum (ETH) presale wallet, the Blockchain.com wallet, and the old Multibit Classic wallet. Users have problems not only forgetting their passwords, but also various bugs and stop publishing.

Not long after, a friend of mine from LA was looking for a business idea to invest in, and after they heard about these wallet problems, they decided to invest in a seed round. Thus KeychainX LLC was born.

Our main job is to recover lost cryptocurrencies for people all over the world. But after relocating from the US to Zug, Switzerland this November, we also started developing a patent-pending keyless cryptocurrency wallet.

Who is your typical client?

Obviously, the answer is cryptocurrency wallet owners who have lost their keys.

We can roughly divide them into three categories. The first category is early-stage investors who have had a wallet for a long time and suddenly realize that those few hundred bucks are now worth millions.

The second type of customer is someone who recently bought some tokens but never backed up their private keys. All they have is a crypto wallet. And a third category, and what seems to be an increasing number of clients, are relatives of deceased family members who left behind a fortune in cryptocurrency that the relatives don't know how to recover.

What is the largest amount of cryptocurrency you have recovered?

We're bound by a non-disclosure agreement, but I'd say it's no lower than seven figures, and we're close to $2 billion in assets under management (AUM) in crypto wallets. I believe the current losses in cryptocurrencies are over $100 billion.

What does a typical chain of actions look like when restoring a wallet?

This involves several steps, starting with making sure the client is the owner of the wallet, then we sign a non-disclosure agreement with the client stating the terms of the restoration. Afterwards, we conduct interviews, asking for various hints or leads for password guessing. Finally, we reserve a certain number of servers based on wallet value and wallet type.

Different wallets require different hardware setups (such as GPU or CPU server clusters). Of course, there are new wallets, new blockchains and wallet encryption types are constantly added in the market, and we need to modify our algorithm.

What kind of wallets do you work with?

We work with all wallets, but mainly Bitcoin (BTC), Dogecoin (DOGE) and Ethereum (ETH). This year, more and more users of Solana (SOL) and Cardano (ADA) wallets have reached out to us as activity on both blockchains has increased.

We also do hardware wallets, such as Ledger or Trezor, whose passphrase or part of the mnemonic is lost. We can probably recover up to 4 missing words from a 12 or 24 word mnemonic. We've also done several repairs to dead hard drives, broken phones, locked macbooks or pc's.

A very common issue is people getting locked out after their facial recognition system stopped working, or accidentally switching phones without backing up their seed phrase or wallet data.

How are you different from your competitors?

I believe so far there is not a real competitor doing what we do in terms of finances and computer power. We are registered on a regulated marketplace, have a non-disclosure agreement developed by Zurich crypto law firm MME Legal, and actively present and speak at conferences around the world.

Personally, I would never send my wallet to an anonymous service, home store, or a one-man show that doesn't even have a registered business. After all, when the wallet is finally recovered, you want to know who you did business with and who is handling your private keys when the wallet is finally recovered.

Tell us about your team: what experience do they have?

Our teams are divided into categories according to their tasks. We have marketing and account teams who answer emails and attend conferences like Token 2049, AIBC Summit, Rome Blockchain Week or the recent Blockchain Conference in Hamburg, Germany.

We also have a group of programmers who specialize in various algorithms or GPU systems such as nvidia CUDA technology, or CPU tasks that perform high-intensity wallet encryption such as Ethereum v3 or BIP38 wallets.

What is your greatest achievement so far?

In terms of the number of wallets, our most exciting achievement is probably close to 10 wallets opened in a single day, but with over 200 wallets opened in the last year alone, and a few more from 2012, it's a real Exhilarating experience.

Our biggest achievement is yet to come as we have some really big wallets that will open next year in 2022.

What is the future of KeychainX?

In addition to the accelerated list of wallets and blockchains, we have two roadmaps.

First, developing a custom ASIC board to increase the speed of cracking wallets, and second, developing our keyless encrypted wallet, patent pending since 2019. It features social recovery, geolocation, and various other implementations such as timelock transactions and NFT ownership verification.