SoK: Cryptographic Key Recovery for Cryptoasset Custody and Financial Technologies
How to safely recover access to cryptocurrency wallets when keys are lost
When someone loses access to a cryptocurrency wallet, recovery mechanisms let them regain control—but they vary widely in how they work and where they place risk. This paper analyzed 77 different recovery systems across custody platforms and financial technologies, revealing that most recovery methods shift trust to third parties, create new abuse vulnerabilities, and leave recovery metadata unprotected.
Cryptocurrency users routinely lose access to accounts containing real money, and recovery is often their only option—yet most recovery systems force a dangerous choice between security and recoverability. This taxonomy helps wallet providers and developers understand the tradeoffs in existing approaches and identifies six specific gaps (like unprotected recovery metadata and poor lifecycle management) that create theft vulnerabilities. Better recovery design could prevent both devastating user losses and the security breaches that plague custody platforms today.