A stolen coin can be returned. A leaked identity cannot.
The author argues that the collection of sensitive identity data by crypto and hardware wallet companies creates dangerous 'honeypots' for hackers. Unlike financial losses, which can be recovered, leaked personal identities and home addresses represent permanent security risks that cannot be rotated or fixed.
Why it matters
It highlights a critical flaw in the current digital security paradigm where companies prioritize data collection over user privacy, leading to long-term physical and digital threats.
The unfixable breaches that should keep us up at night make far smaller headlines, precisely because what they takek cannot be returned. In the same time frame of the $320 million hack Trezor confirmed that a further 67,000 customers had their names, phone numbers and home addresses exposed through a shipping vendor. A separate leak put roughly 200,000 records into the open, with government ID numbers sitting beside verified wallet addresses. Address data stolen from a hardware wallet maker back in 2020 is still arriving as physical mail demanding bitcoin, six years later. You can rotate a compromised key. You cannot as easily, quickly, or safely rotate your home address, your face, or your passport number.
Evin McMullen is co-founder and CEO of Billions Network , which builds privacy-preserving digital identity for people and A.I. agents.
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