Oobit says forgotten passwords are the leading cause of crypto access loss, outweighing issues with external exchange accounts.
Forgotten passwords are the leading cause of crypto access loss among US holders, surpassing issues with external exchange accounts, according to a new survey by crypto payment app Oobit.
The company surveyed 1,000 US-based crypto holders to understand how often users lose access to their wallets or accounts, whether they recover their assets, and what happens after a lockout. The findings show that access loss is a common issue, with more than one in three respondents, or 35%, saying they had lost access to a crypto wallet or account.
Among those affected, nearly one in three, or 31%, never recovered their assets. More than one in 10 respondents who lost access, at 12%, said they lost over US$5,000 in crypto value from a single incident.
The most common cause was forgotten passwords, cited by 33% of those who experienced access loss. Lost two-factor authentication access accounted for 20% of lockouts, while misplaced seed phrases were also identified as a major factor. By comparison, the data suggests that user-side access failures were more common than issues linked to external exchange accounts.
Oobit’s survey also found that access losses were more likely to happen in self-custody wallets than on exchanges. Among those who lost access, 49% said the incident occurred in a self-custody wallet, while 36% said it happened on an exchange account. A further 10% said both were affected, while 5% were unsure.
The findings highlight the recovery risks associated with crypto ownership, particularly for users who rely on self-custody wallets. Among respondents who permanently lost crypto, 30% said they did not know beforehand that the loss could be permanent.
Access loss also appeared to affect user behaviour. After being locked out of a wallet or account, 40% of affected respondents said they improved their backups and security, including seed phrase storage, backup codes, password managers, and two-factor authentication.
“The biggest mistake people make isn’t choosing the wrong wallet. It’s assuming they’ll remember how to get back in,” said Amram Adar, CEO of Oobit. “A few minutes of preparation today can be the difference between recovering your assets and losing them permanently.”
The survey also suggests that recovery remains a trust issue for the industry. Among crypto holders who had also been locked out of a bank account, 66% said banking recovery was easier, while only 12% said crypto recovery was easier. Clear and reliable recovery options were the top factor that respondents said would improve trust in crypto, cited by 42%.
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