HEATH MUCHENA: The crypto security wake-up call — own your wealth or lose it

By now you’ve heard the mantra: “Not your keys, not your coins.” It’s repeated like gospel in the crypto world — a warning to say self-custody is non-negotiable when operating in the digital asset space. For many, it’s often a painful lesson learnt too late. 

In an age where financial autonomy is within reach, the irony is that most people still choose convenience over security. They trust centralised exchanges, slick mobile wallets and third-party custodians, ignoring the fundamental reality that cryptocurrency was never meant to be held by someone else. It was meant to be owned — by you. 

Yet self-custody is daunting and financial freedom comes at a price. There is no customer support if you lose your seed phrase. No bank to reverse a transaction. No safety net. Just cold, immutable cryptographic certainty. And so, the paradox unfolds: people adopt crypto for its promise of decentralisation but fear the responsibility that comes with it. 

The good news? You don’t need to be a hacker, a cypherpunk or a tinfoil-hat-wearing security guru to secure your crypto. You just need to understand the risks and take the right precautions. 

Centralised exchanges (CEXs) operate like traditional banks, holding your crypto under the guise of “convenience”. They promise seamless trading, easy withdrawals and institutional-grade security. But history has shown time and again that even the biggest names are not immune to catastrophic failure. 

FTX, Mt Gox, Celsius, QuadrigaCX — the graveyard of fallen exchanges is littered with billions in lost customer funds. Just recently Bybit suffered a $1.5bn heist, the largest in history. The attackers? The infamous Lazarus Group from North Korea, using sophisticated phishing techniques to exploit a single point of failure. 

And therein lies the problem: centralisation is a security risk. Even the most well-funded exchange is just a juicy target for hackers, government seizures or internal fraud. 

Keeping your wealth on an exchange is like leaving your cash at a casino. Sure, you can play for a while, maybe even cash out when you need to, but if the house burns down you’re walking away empty-handed. 

Self-custody

The alternative is self-custody — holding your own keys, managing your own security, and truly owning your wealth. But it comes with its own risks. If you take nothing else from this article, remember these three things:

• Protect your private keys from hackers, malware, phishing attacks and physical theft.
• Store backups securely so you don’t lose access to your own funds. 
• Make sure your assets can be passed down in case something happens to you. 

Sound simple? It isn’t. Security is a balancing act. The tighter you lock things down, the harder it becomes to access your own assets. The looser you keep them, the more vulnerable you are. So, what’s the right approach? 

Your crypto security strategy depends on two key factors: how much you hold and how often you access it. Daily users need convenience while long-term holders require robust protection. 

For everyday spending, hot wallets such as Exodus, Edge Wallet or Trust Wallet offer quick access but come with risks. Enhance security by using GrapheneOS on Android or an iPhone in aeroplane mode, and avoid public Wi-Fi to prevent cyber threats. 

For long-term storage, hardware wallets such as Ledger, Trezor, or KeepKey keep private keys offline, making them highly secure. Multisig wallets such as Casa or Unchained Capital add an extra approval layer, while cold storage on an air-gapped computer running Tails OS offers ultimate isolation from online attacks. 

For generational wealth, go beyond basic security. Metal seed backups engraved on steel plates prevent fire, water and physical damage. Distribute backups across multiple locations (never online) to ensure redundancy. Finally, inheritance planning — using a dead man’s switch or trusted legal arrangements — ensures your assets remain accessible to heirs. 

By aligning security with your needs, you strike the ideal balance between convenience and protection, securing your crypto for the long haul. 

The biggest challenge isn’t the technical set-up — it’s the fear. People worry about losing their seed phrase, forgetting passwords, or getting hacked. They underestimate their ability to learn and overestimate their ability to trust corporations. 

Self-custody forces you to take responsibility for your own wealth. Responsibility is uncomfortable. But in an era where financial surveillance is tightening, where banks can freeze your accounts on a whim, where governments are actively working to undermine crypto — it’s the only true path to financial sovereignty. 

• Muchena is founder of Proudly Associated and author of “Artificial Intelligence Applied” and “Tokenized Trillions”.