Cryptocurrencies provide many people a chance to reach financial freedom, however, they aren’t without risks. Many investors lose their assets not just because of bad investments but also due to poor security practices. The crypto space is filled with hackers, scammers, and just enough complexity that newbies could easily wipe their wallets. 

Thankfully, there are ways to avoid losing crypto. By being aware of common security mistakes and getting a self-custodial wallet like OKX Wallet, users can explore Web3 safely! 

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Common Mistakes That Lead to Crypto Loss

1. Holding Crypto on Exchanges

One of the biggest mistakes beginners make is leaving their cryptocurrency on centralized exchanges (CEXs) for long periods. While exchanges are useful for short-term trading, they are not designed for secure, long-term storage. There are several reasons why this practice is risky:

• Exchanges Are Prime Targets for Hackers – Since centralized exchanges hold billions of dollars in user funds, they are frequently targeted by cyberattacks. Hackers can easily make a quick buck through exploiting weak exchanges. Unfortunately, these hacks often come at the cost of many new crypto users losing access to all their exchange funds. A prominent example of this would be the hacking of the Mt. Gox exchange in 2014 which resulted in the loss of hundreds of thousands of Bitcoins.
• Users Do Not Own Their Private Keys – When storing crypto on an exchange, users do not have access to their private keys. This means that they do not have true ownership of their funds. The exchange acts as a custodian, and users must trust that their assets will be handled responsibly. Should the exchange engage in shady practices like stealing user assets, users could easily lose all their money. An example of this would be the bankruptcy of the FTX exchange following the leaked news of them commingling user assets with their sister company and engaging in risky trading practices. 
• Exchanges Can Shut Down Without Warning – Regulatory actions, bankruptcy, or internal fraud can lead to exchanges freezing withdrawals, shutting down entirely, or ceasing operations in a certain region. For instance, Binance was ordered to cease operations in several countries due to not complying with appropriate regulations leading to some users being unable to withdraw their funds. 

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2. Falling for Phishing Scams

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Phishing is one of the most common ways hackers steal crypto. Scammers create fake websites, emails, and social media profiles that closely resemble legitimate platforms. Think about those fishy text messages, claiming to be a bank, asking for a bank account number and one-time password (OTP). Those are classic examples of phishing. Once users enter their credentials or connect their wallets to these fraudulent sites, their funds can be drained instantly.

Some common phishing methods include:

• Fake dApps and Websites – Attackers design malicious decentralized applications (dApps) that look like real DeFi platforms or NFT marketplaces. When users connect their wallets, scammers gain access to their funds.
• Impersonation Scams – Fraudsters impersonate official exchange support teams on social media and ask users for their recovery phrases or private keys under the pretense of helping them.
• Email and SMS Spoofing – Scammers send emails or text messages with links to fake login pages, tricking users into entering their credentials.

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3. Losing or Mishandling the Recovery Phrase

A recovery phrase (seed phrase) is a 12 or 24-word key that allows users to restore access to their wallet if their device is lost or stolen. Since non-custodial wallets do not store this information, losing the recovery phrase means losing access to the funds permanently.

Common mistakes include storing the recovery phrase online (making it vulnerable to hacking), writing it down only once (making it vulnerable to loss, theft, or damage), and sharing it with others which could lead to them stealing the stored funds. Another issue would be creating too many wallets making it difficult to safeguard all the recovery phrases. 

Users should write down their recovery phrase on physical paper and store it in a secure location/s. For additional security, some choose to engrave it on metal plates to protect against fire or water damage.

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Why Choose OKX Wallet for Crypto Security?

Knowing that there are multiple ways to lose one’s assets, it's important to find a way to secure them. One of the best ways to store cryptocurrencies would be to use a non-custodial wallet like OKX Wallet. 

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OKX Wallet is designed to offer:

• Full Control Over Private Keys – Since OKX Wallet is non-custodial, only the user has access to their funds. Unlike exchanges, there is no risk of losing crypto due to platform failures. Users can access their crypto anytime and anywhere. 
• Phishing and Scam Protection – OKX Wallet includes built-in phishing protection, warning users when they attempt to interact with suspicious dApps or fraudulent sites. By using a secure wallet with anti-phishing features, users can reduce their risk of falling victim to scams.
• Multi-Chain Compatibility – Users can store, send, and receive assets across different blockchains, eliminating the need for multiple wallets. This makes it much simpler for beginners to store and secure their passwords since having a lot of wallets can be quite difficult to manage. 
• Hardware Wallet Integration – For added security, OKX Wallet also supports hardware wallets, keeping private keys offline and safe from cyber threats.
• Seamless Access to DeFi and NFTs – Users can explore over 1000 decentralized apps (dApps) such as decentralized finance (DeFi) platforms and NFT marketplaces directly through the OKX Wallet interface. This process makes it much safer to engage with Web3 content since staying within the OKX Wallet app reduces chances of phishing. 

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Taking Control of One’s Crypto Security

Crypto security is ultimately the responsibility of the user. While Web3 offers incredible opportunities, it also comes with risks that can be mitigated by using the right tools and following best security practices. By choosing to use a self-custodial wallet like OKX Wallet, investors can better protect their assets and explore Web3 at ease. 

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