Hanwha Bets $13M on 'Seedless' Crypto Wallets: The End of 12-Word Nightmares?

$13 million says Hanwha Investment & Securities has a theory: crypto's biggest barrier isn't volatility—it's those damn 12-word recovery phrases.

South Korea's financial giant just backed Kresus Labs, a U.S. blockchain infrastructure firm developing "seedless" wallet technology. The investment, roughly 18 billion won, follows a December memorandum signed during Abu Dhabi Finance Week.

The $140 Billion Password Problem

Here's what Hanwha is betting against: the current wallet system that forces users to memorize 12-24 random words like "pizza elephant moon bicycle." Lose those words, lose your crypto forever.

The numbers are staggering. Researchers estimate 20% of all Bitcoin—worth roughly $140 billion—sits locked in inaccessible wallets because owners forgot their seed phrases. James Howells famously threw away a hard drive containing 7,500 Bitcoin. Stefan Thomas has two password attempts left before losing $240 million worth of Bitcoin.

Kresus' "seedless" recovery uses multi-party computation (MPC) security systems, allowing wallet restoration through familiar methods like email and phone verification—no word memorization required.

Institutional Infrastructure Play

While crypto markets swing wildly, institutional money keeps flowing into infrastructure. Hanwha plans to use Kresus technology for client-facing digital asset services and tokenized versions of traditional financial products.

This reflects a broader trend: rather than betting on speculative tokens, institutions target custody, security, and tokenization layers that integrate with existing financial systems. Wallet infrastructure investments are up 40% year-over-year, even as overall crypto funding declined.

Goldman Sachs CEO David Solomon recently said he owns "very little" Bitcoin but watches the technology closely. The message: bet on the pipes, not the water flowing through them.

The Convenience-Security Trade-off

But here's the tension: making wallets easier often means making them less decentralized. Traditional crypto advocates argue that removing seed phrases removes user sovereignty—the whole point of crypto.

Barry Sternlicht, whose Starwood Capital manages $125 billion, wants to tokenize real estate but says U.S. regulations create barriers. Meanwhile, enterprises demand compliance frameworks that often conflict with crypto's permissionless ethos.

Kresus must navigate this balance: enterprise-friendly enough for institutions, secure enough for crypto natives.

The answer may determine whether blockchain becomes the internet's next layer or remains a niche technology for the technically savvy.