The glowing red sky from the fires that has devoured Southern California has taken everything from residents; homes, offices and memories.

But a 70-year-old woman has lost more than her home; she had lost all her life savings after discovering that both her crypto wallet and private keys, which was apparently written on a piece of paper, disappeared in the flames.

Since no backup or recovery phrase was created, the woman is now locked out of her crypto assets. The 70-year-old woman's nephew took to social media to describe the family's plight, writing

"Most of her savings were in crypto and she lost her wallet and seed phrase, and doesn't have backups. I feel sick. This is all she had."

Sparked a conversation on crypto wallet protection

This tragic event has highlighted how crucial it is to securely store both the wallet and private key separately. The private key serves as the gateway to a crypto wallet, and without it, there is no way to regain access to the funds. In this instance, the absence of a robust backup system has led to the permanent loss of her savings, highlighting a critical vulnerability that crypto holders must address.

While this is a unfortunate event for the family, but it also acts as a precautionary tale for crypto owners to adopt secure storage practices.

Experts have recommend keeping seed phrases offline and in multiple secure locations, with many advocating for storage solutions designed to withstand fire or water damage, such as metal backup plates.

With the emergence of newer technologies, like seedless wallets and multi-signature systems, it also offers users with a more advanced and reliable way to safeguard their digital assets.

Crypto companies also suffered losses from the fire

But this 70-year-old woman is not the only person who have lost their valuable digital asset in this fire. Similarly, a few crypto companies in the city have also suffered severe losses after they found themselves in the pathway of the flames.

Swan Bitcoin, which has employees based near Santa Monica, and blockchain infrastructure provider BlockDaemon, headquartered in Los Angeles, both reported significant losses, including the destruction of hardware wallets containing valuable cryptocurrency assets after their companies were unfortunately struck by the incoming fire.

In the past, we would hardly associate natural disasters with digital assets. But this saga has proved otherwise, and that our digital assets can be vulnerable to fires as well if they are not properly protected.

This incident serves as a wake-up call for cryptocurrency holders to reassess their approach to securing digital assets. The loss of funds in this case could have been mitigated with more effective backup strategies or the use of advanced wallet solutions. As natural disasters become increasingly common, crypto users must take proactive steps to protect their holdings against unforeseen events.