The security level of crypto assets is primarily determined by the user’s own decisions. Let’s look at the key threats and the methods that help reduce the risks of losing digital funds.
According to Chainalysis data, in 2025, total losses from cryptocurrency theft exceeded $3.4 billion. At the same time, nearly 160,000 incidents were related to the compromise of crypto wallets*.
* Crypto wallet compromise is the acquisition by attackers of unauthorized access to a user’s wallet, their private keys, or seed phrase, which allows them to fully control the assets without the owner’s knowledge.
Personal literacy is the foundation of cryptocurrency security
For any digital asset owner, the ability to ensure their protection is a critically important skill. In most cases, user errors cause losses. Analysts note that a significant portion of crimes in the crypto sphere are related to social engineering* — attacks aimed directly at people.
* Social engineering refers to methods of psychological pressure and manipulation in which users are persuaded to voluntarily disclose confidential data (seed phrases, private keys, access codes) or perform actions that lead to the loss of funds.
In 2025, the number of crypto fraud cases increased by about 30%. A significant share consisted of phishing attacks* and scam projects*, which makes compliance with basic security rules especially relevant.
* Phishing is a form of digital fraud in which attackers impersonate legitimate services. Fake websites, emails, messages in messengers and social networks, as well as search engine ads, are used for this purpose. The goal of phishing is to mislead the user and prompt them to disclose confidential information (logins, passwords, seed phrases, private keys, two-factor authentication codes) or to follow malicious links that lead to device infection or transaction address substitution.
* Scam projects are fraudulent cryptocurrency initiatives whose main goal is to steal users’ funds. Such projects are disguised as investment platforms, DeFi services, NFT collections, airdrops, staking programs, or closed “exclusive” offers with supposedly guaranteed returns. As a rule, scam projects are characterized by aggressive marketing, promises of high, fast profits, a lack of transparent documentation, and team anonymity. After attracting a sufficient volume of funds, the organizers either disappear completely or artificially collapse the token’s value, depriving investors of the opportunity to recover their assets.
Cold wallets and their role in cryptocurrency protection
All crypto wallets are conventionally divided into “hot” and “cold.” Hot wallets include software solutions such as mobile, desktop, and browser wallets, as well as online services.
Their main advantage is convenience. However, constant internet connectivity makes such wallets more vulnerable to online attacks. They more often become targets of hackers, malware, and phishing schemes. There is also a risk of private key interception using keyloggers* and spyware.
* Keyloggers are malicious programs or hardware devices designed to secretly track and record all keystrokes on a user’s device. The main purpose of keyloggers is to intercept confidential information, including passwords, PIN codes, account login data, private keys, and seed phrases from crypto wallets.
Cold hardware wallets provide a significantly higher level of protection. They do not require a constant internet connection, and private keys are stored in secure chips (Secure Elements) that are completely isolated from the external environment.
Network connection occurs only at the moment of making a transaction is made, and confirmation is performed directly on the device. This practically eliminates remote hacking — an attack is possible only with physical access to the wallet.
Although hardware solutions are less convenient for frequent operations, they are considered the optimal choice for long-term storage and maximum cryptocurrency security.
Non-custodial and custodial storage
Hardware and software wallets are non-custodial — the user independently controls the private keys. An alternative is custodial wallets, where key management is delegated to a third party.
Custodians are usually crypto exchanges and specialized storage services. They take responsibility for the technical and organizational protection of assets; however, the user effectively entrusts them with full control over their funds.
If such services are hacked, clients may incur losses, although large companies often compensate for damages. For example, in February 2025, during an attack on the Bybit exchange, $1.4 billion in ETH was stolen. Despite the scale of the incident, the assets were recovered, and users were practically unaffected.
Universal measures to improve cryptocurrency security
Regardless of the type of wallet, it is recommended to follow these rules:
- Use two-factor (2FA) or multi-factor authentication (MFA)*;
- Enable a PIN code or biometric protection, if supported;
- Create complex and unique passwords and update them regularly.
- Install software and operating system updates promptly.
- Download applications only from official sources.
- If possible, use a separate device for cryptocurrency work.
- Store backup copies of seed phrases and keys offline, in a secure place.
- Work only through a secure internet connection.
- Save verified transfer addresses separately.
- Add official websites to browser bookmarks.
- Never enter private keys on third-party resources.
* Two-factor (2FA) and multi-factor authentication (MFA) are methods of enhancing the security of accounts and crypto wallets based on the principle of multi-level user identity verification. Their key feature is that access requires confirmation not by a single factor but by several independent factors, significantly reducing the risk of unauthorized access even if one of them is compromised.
Authentication factors are divided into three main categories:
- knowledge — something the user knows (password, PIN code);
- possession — something the user has (smartphone, hardware token, authenticator app, one-time code);
- biometrics — something the user is (fingerprint, facial recognition, iris scan).
When using 2FA, access is granted only after confirming two different factors, for example, a password and a one-time code from an authenticator app. MFA extends this approach and may include three or more factors, which is especially relevant for protecting large sums or corporate accounts.
Security when exchanging cryptocurrency
Risks also exist at the stage of buying or selling assets, so it is important to choose reliable platforms. The main exchange methods include:
- centralized exchanges;
- online and offline exchangers;
- P2P platforms;
- direct deals between individuals.
Exchanges and P2P services involve storing funds with a third party, whereas direct deals carry a higher risk of fraud.
Online exchangers remain the fastest and most convenient option: cryptocurrency is credited directly to a personal wallet, with no additional withdrawal fees.
Rules for safe exchange
- Use trusted exchange services (for example, on BestChange);
- Perform AML checks on addresses.
- Do not send funds until the counter payment is confirmed.
- Immediately contact support if you have any suspicions.
- Verify the authenticity of websites and legal documents.
- Treat anonymous platforms without KYC/AML with caution.
How to protect yourself from scams
The ability to recognize fraudulent schemes is a key element of cryptocurrency security. The most common signs of scams are:
- promises of guaranteed and fast profits;
- lack of transparent information about the project and the team;
- pressure, urgency, and manipulation through fear of missing out;
- absence of token listing on major exchanges;
- lack of media and specialized sources mentioning the project.
Additional protection measures
- do not follow suspicious links;
- use multisignature (Multisig)* for large amounts;
- Create a separate wallet for questionable services.
- study user agreements and project policies;
- follow specialized blogs about fraud;
- Check projects via CertiK, TokenSniffer, RugDoc.
* Multisig (multisignature) is a cryptographic mechanism for protecting digital assets in which authorization and execution of a transaction require confirmation by several independent private keys at once, rather than one, as in standard wallets. This approach предполагает distributing control over funds among several participants, devices, or storage locations, which fundamentally increases the level of security. Multisignature is implemented according to a predefined rule (for example, 2 of 3 or 3 of 5 keys), under which a transaction becomes valid only after the required number of key holders confirm the operation.