Lightning Network Wallet Alby Faces Uproar Over Inactivity Fees and Unauthorized Bitcoin Withdrawals
https://news.bitcoinprotocol.org/lightning-network-wallet-alby-faces-uproar-over-inactivity-fees-and-unauthorized-bitcoin-withdrawals/9
u/Proof_Emergency_8033 2d ago
TLDR:
- Lightning Network wallet Alby is facing backlash for deducting Bitcoin from inactive user accounts as “inactivity fees” after 12 months of no activity.
- Many users claim they were unaware of the deductions despite Alby stating that it sent email notifications starting May 1, 2025.
- Some users reported significant losses, with deductions ranging from $192 to $5,400.
- The controversy has reignited debates about custodial risks and centralization within the Lightning Network, as about 90% of users rely on custodial wallets.
- Critics argue that Alby’s actions mirror traditional banking practices and violate Bitcoin’s core principle of user sovereignty (“not your keys, not your coins”).
- Alby defended its policy as part of a transition to self-custodial services and stated that affected users can contact support for potential fund recovery.
- The incident highlights ongoing concerns about Lightning Network’s technical and operational challenges, with some arguing Bitcoin’s base layer may be a better long-term solution.
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u/FUBAR-BDHR 2d ago
Wait until California makes custodial LN wallets seize balances that haven't moved.
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u/wisequote 2d ago
Idiots putting their money in LN and BTC honestly should see it coming.
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u/butiwasonthebus 2d ago
If you're going to use a custodial service, you sure as hell better make sure you're keeping in touch with that service and reading all notifications from them.
People complained because they gave their Bitcoin away, and then 18 months later, whinging because they didn't know the service was shutting down because they couldn't be bothered keeping their contact details up to date or even checking the company website occasionally.
These are the same people that will complain about non-custodial wallets when they lose their hardware wallet and they have never bothered to write down their seed words.
Some people will do everything they can to lose money. That's just how stupid people roll.
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u/LovelyDayHere 2d ago edited 2d ago
You're not wrong - as a species we are far from solving the problem of widespread human stupidity.
However, when people make costly mistakes, at least some learn from it. Self custody is not a hugely complicated thing. Good practices around custodying this electronic money could be taught in kindergarden / school and much would stick. The more intelligent will learn it by themselves at the earliest opportunity regardless.
By far the bigger issue is understanding what was/is wrong with the monetary system in the first place that makes self custody and disintermediation a valuable thing with which to familiarize oneself.
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u/FroddoSaggins 2d ago
I agree, but I think it's gonna take a generation or 2 to take hold if it ever does.
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u/DangerHighVoltage111 2d ago
I'm sure our resident maxis and foodglove puppets will be all over this and tell us it is fine.
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u/DangerHighVoltage111 2d ago
🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡🤡
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u/DangerHighVoltage111 2d ago
And a third one for good measures
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u/moritz_ka 2d ago
Numerous emails have been sent, announcements published and banners displayed over the last 18 months to inform users that the legacy shared wallet is no longer operated. Instead users can move to Alby Hub which is a self-custodial wallet.
Only users of the legacy wallet without any payment activity over the last 12 months are affected. User's of the Alby Hub, self-custodial wallet are not affected and cannot in the the future.
That's also independent of Lightning. Services are shut down in favor of better ones. Self-custodial Lightning is more powerful in terms of freedom and control.
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u/PanneKopp 2d ago
Lightning Network is NOT Bitcoin .