How a Little Mistake Can Make You Go Bankrupt: Lessons from a Trader Who Lost Nearly $14k of His Life’s Savings

Imagine losing everything you’ve worked for in the blink of an eye. That’s the nightmare scenario that became a harsh reality for one crypto investor. A simple mistake, a wrong network, and suddenly, a lifetime of savings vanished like smoke. This story not only highlights the risks involved in crypto transactions but also offers valuable lessons for others, which is why you should read this.

One trader recently shared a heart-wrenching story on an anonymous crypto confession X (formerly Twitter) handle — Coinfessions — on how he lost $13,600, according to him, “entire life savings” due to a simple error “in one transaction.” 

This anonymous trader wasn’t just dealing with a financial loss; they faced a potential life crisis. Rent was due, and a newborn was on the way. It’s a perfect storm of stress and uncertainty. 

He said, “I’m back to zero.” 

I just lost my entire life savings in one transaction. I sent it to the correct wallet address, but used the wrong network. Just like that. That's it. I'm back to zero. $13,600. I have rent due next week and a newborn on the way. I'm currently seeking a miracle.

— Coinfessions (@coinfessions) August 3, 2024

This mistake, though seemingly small — which can happen even to the best of us — had devastating effects. The trader’s funds were sent to the correct wallet address but on an incompatible network, rendering the funds inaccessible. The emotional toll of such a loss can be immense. It’s like falling off a cliff and realizing there’s no safety net. Fear, anger, and disbelief are just some emotions that must be swirling around in their head. The trader said, “I’m currently seeking a miracle.”

Coinbase’s Response

In response to the trader’s plea, Coinbase support reached out, empathizing with him and offering support to recover his lost funds. It’s, however, unclear or otherwise unstated by the anonymous trader on which CEX/DEX this loss occurred, but from Coinbase’s reply, it does seem it was, in fact, on the Coinbase platform that the error was committed hence their offer of support. Their reply in part read, “We’d like to help as much as possible.” 

“This information will help us look into the issue more effectively. Thank you,” they further added.

Thus, Coinbase’s prompt response might provide some respite to this unfortunate trader’s demoralizing financial dilemma.

But how could this have been avoided?

This incident simply stresses the importance of double-checking every detail before making a transaction. One small oversight can lead to significant losses. So, in the future, you should always verify the wallet address and network before confirming a transaction.

You can even do trial transactions, as a concerned X poster @rccarlsonjr lamented. That is, send a small amount first to ensure everything is correct. This way, if there’s an error, the loss is minimal.

Also, understand that different cryptocurrencies operate on different networks. Ensure the network you’re using is compatible with the recipient’s wallet. And if you can, use tools and resources that help verify transactions and provide alerts for potential errors. You’re “Better safe than sorry.”