What happens when cryptocurrency is sent to the wrong address?

The decentralized nature of blockchain gives users full control over their assets without the need for a third party or centralized organization.

On the positive side, this means transactions cannot be paused or rejected by regulators. However, it also means that the user is fully responsible if any problems arise with very little outside support.

Additionally, the structure of crypto addresses and their uncommonness means there is an increased risk of errors during transactions. For example, cryptocurrency can be sent to the wrong address or even the wrong network, making it difficult to get it back (if at all).

But will a user’s assets be lost forever if they are sent to the wrong address? Let’s find out with Bitcoin Magazine through the following article.

Is cryptocurrency lost when sent to the wrong address?

Simply put, the user loses custody of his assets while the intended recipient does not receive the sent assets. When cryptocurrency is sent to the wrong address, there are three possible scenarios:

Address is burned address or dead wallet

Burning addresses do not have private keys; therefore assets sent to this address cannot be recovered.

Dead wallets are inactive, in that funds sent to these addresses can only be accessed by the private key holder if they start using the wallet again. However, because most dead wallets are inactive because investors lost access or passed away without handing over control of the wallet, it is nearly impossible to contact the owner.

Address does not exist

When a user enters an address that corresponds to the wallet structure of the blockchain, the transfer will be performed even if this address has not been created (mined from the address pool).

Theoretically, anyone who receives this address when creating an account can access the funds sent to them. However, the possibility of this happening is very rare, because Ethereum alone has up to 16^40 public address combinations.

Wallet is active

If the wallet is active, the recipient gains custody of the funds. The sender can get their funds back by identifying and contacting the wallet owner. If it is an exchange account, you can contact the exchange to find a way to restore it.

What happens if assets are sent to the wrong Blockchain?

Transactions can only be performed if the wallet address corresponds to the wallet structure of the blockchain. In case of incorrect format, the submission request will be rejected. For example, assets from Ethereum cannot be migrated to the Bitcoin, Tron or Solana blockchain because the wallet structure is completely different.

However, this can happen in networks that have similarities, like Ethereum and other Layer-1 and Layer-2 EVM networks like Fantom and Arbitrum, or networks that do not support EVM with a blockchain address structure similar to Taraxa and Sui.

In the case of sending funds to a non-EVM-enabled network with a similar wallet structure (like Taraxa and SUI), the sender will not be able to recover. This is because the smart contract that governs creation and transactions does not exist on the target network.

Note that this does not apply to bridged assets, which can be connected to networks with dissimilar address structures through a number of tools and means.

What to do if you send crypto to the wrong address?

Assets can only be recovered if they are sent to an active address. If the wallet is dead, inactive, the contract or the address is burned, the assets cannot be recovered

An active wallet is a personal or institutional wallet (belonging to an exchange or any other centralized organization). Here’s what users can do:

Contact the exchange’s customer support

Some centralized exchanges offer asset recovery services when mistakenly transferred to any of their wallets. While terms may vary depending on each exchange, affected individuals may be able to recover all or part of their lost assets.

Contact owner

If the owner is known, the individual who sent the wrong item can contact them to negotiate restoration. If assets are sent to strangers, efforts should be made to identify the recipient by analyzing their transactions or tracking transfers to centralized exchanges.

The chances of recovery depend on successfully identifying the recipient, although the sender is still dependent on the recipient wallet owner’s willingness to return the mistakenly transferred funds.

Prevention

In cryptocurrency transactions, the network only validates the address structure and makes the transfer if it corresponds to the prescribed structure.

This makes it easy for users to send money to the wrong address. Below are some precautions users can take to reduce the risk of sending their assets to the wrong address;

Copy and paste address

Cryptocurrency wallet addresses are usually a combination of a series of alphanumeric characters. To ensure the recipient address is entered correctly, always copy and paste. Manually entering wallet addresses is not only time-consuming but also increases the possibility of errors.

Scan QR code to transfer money

The scanning feature will automatically copy the wallet address into the recipient address box. However, make sure to verify everything is correct, especially the address and amount to send before confirming the transaction.

Meticulous inspection

First, verify from the recipient that they sent to the correct address. If you plan to send to an exchange, make sure the address is compatible with the asset and network. Please check each step carefully before moving on to the next step.

Add address to Wallet contacts

Cryptocurrency wallets like MetaMask and Trust Wallet have an address book feature, allowing users to save frequently used addresses. Centralized cryptocurrency exchanges also have similar features. Save frequently used addresses to a list for easy reuse when needed.

Additionally, it should be noted that this feature may require the sender to specify the recipient’s network. Keep this in mind when sending assets to the same recipient but with a different network.

Request recipient’s domain address

Cryptocurrency wallet naming services like Ethereum Name Service (ENS) and Unstoppable Domains package long wallet addresses into human-readable domain names. This can be easily remembered. To reduce the possibility of getting the recipient’s wallet address wrong, ask the recipient to send the domain address if available.

How to recover if assets are sent to the correct address but the wrong network

Ethereum investors can use the same wallet for every EVM network. In some cases, users transferred assets to the correct wallet address but chose the wrong network.

In this case, assets can be easily recovered by transferring to the target network on the user’s wallet, a process similar to adding the EVM network on MetaMask and Trust Wallet.

If the wallet does not support cross-network integration, the sender can export to the wallet more flexibly using a private key or seed phrase. After importing, add the network that sent the wrong asset. Once completed, the sender can access his assets.

For example, if sending ETH to Polygon instead of Ethereum, the sender can access the assets by adding the Polygon network to his wallet.