How to keep your cryptoassets safe and secure

Cryptoassets may not be regulated financial products, so please be aware that trading them carries a considerable amount of risk for your capital. Cryptocurrencies are also not covered by existing consumer protection laws and are not suitable for the majority of investors.

If you’ve invested in cryptoassets, it’s important to be aware of how to protect your investment and reduce the risk of losing access to your wallet. Cryptoassets may also be an attractive target for scammers and fraudsters.

It’s important to note that keeping your cryptoassets safe doesn’t mean protecting their value from investment volatility. All investments are exposed to some risk: their value can rise as well as fall, and you could get back less than you invest. As a high-risk investment, cryptoassets may experience greater volatility than traditional investments, and you should carefully consider how this aligns with your risk profile and financial circumstances. 

However, there may be steps you can take to reduce the risk of losing access to your cryptoassets and falling victim to fraud.

Several crypto investors have been featured in the media after losing access to their cryptoasset

There have been several cases of crypto investors losing access to their investments in recent years, demonstrating why it’s important to understand how your assets are held.

For example, one anonymous British investor lost about £4,000 worth of bitcoin when a trading platform went bust in 2014. According to LBC (26 August 2026), it took the investor 12 years to regain access to the bitcoin that is now worth £3.3 million. 

The outcome has been very different for James Howells, who lost a hard drive containing £570 million of bitcoin in 2013. The BBC (1 May 2025) noted that, despite his attempts to access the landfill where the hard drive is believed to be, he had been unsuccessful in recovering his investment. 

How to protect your access to your investments will depend on whether you’re a custodial investor or a self-custodial investor. 

With a custodial arrangement, a centralised exchange or other third party holds your cryptoassets on your behalf. Investors can log in with a password and two-factor authentication, while the exchange controls the private keys or other credentials needed to access the assets. You should treat your logins in the same way that you would for other financial accounts, and ensure your personal details remain secure.

As noted in the LBC article, you should also consider how you’d access your investments if the custodian became insolvent. If you have significant holdings, you may wish to consider whether spreading them across multiple platforms could reduce your exposure to any one provider.

With self-custody, investors use a software or hardware wallet to manage access to their cryptoassets. These generate a seed phrase (a sequence of words), which can be used to restore access to a wallet after a device is lost or destroyed. As a self-custodial investor, you’re responsible for asset recovery and security.

It’s important to keep a secure backup of your seed phrase in case you need to restore access to your wallet. You should note that anyone who obtains the seed phrase may be able to control your assets. 

Crypto wallets present an attractive opportunity for scammers

As crypto wallets can hold large sums, they can be attractive to fraudsters. So, it’s important to be aware of potential scams and how you might protect yourself from theft.

There have been cases of fake crypto investment sites and deepfake videos that appear to show experts promoting fraudulent schemes. Criminals might also try to obtain your passwords, personal details, or seed phrase to gain access to your existing wallet. 

A Guardian (28 June 2026) article notes that some investors have even been scammed while trying to recover their seed phrase using what they believed was a free tool.

The same red flags you see in other investment frauds often apply to crypto scams.

Scammers may impersonate someone from a trusted organisation in an attempt to secure your personal information. You should never share your passwords, recovery codes, or seed phrase with someone else.

You should also be cautious if someone is pressuring you to act quickly. For example, they might claim that your account will be frozen and you need to withdraw the money immediately, or that your wallet is compromised and you should move assets to a safe wallet. 

If you’re considering new investment opportunities, remember that if something sounds too good to be true, it probably is. 

Get in touch

If you’re interested in investing in cryptoassets, please get in touch. We could help you understand how they might fit into your overall financial plan as well as consider alternative options. Please don’t hesitate to get in touch to arrange a meeting. 

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. 

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.