What are the risks of self custody in the crypto space?

3 answers

• Jan 13, 2022 · 3 years ago
  Self custody of cryptocurrencies can be risky due to the potential for loss or theft of private keys. If your private keys are lost or stolen, you may permanently lose access to your funds. It is important to securely store your private keys and use strong passwords to minimize the risk of unauthorized access. Additionally, self custody requires technical knowledge and can be challenging for beginners. Without proper understanding of how to securely manage and store your private keys, you may inadvertently expose yourself to risks. It is recommended to thoroughly research and understand the best practices for self custody before taking on this responsibility.
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• Jan 13, 2022 · 3 years ago
  The risks of self custody in the crypto space are real and should not be taken lightly. One of the main risks is the potential for human error. If you make a mistake while managing your private keys, such as misplacing them or accidentally sharing them with someone else, you could lose all of your funds. Another risk is the possibility of hacking or malware attacks. If your computer or mobile device is compromised, hackers could gain access to your private keys and steal your cryptocurrencies. It is crucial to use strong security measures, such as hardware wallets and two-factor authentication, to protect your assets. Lastly, self custody also exposes you to the risk of regulatory changes and legal issues. Depending on your jurisdiction, self custody may be subject to certain regulations and compliance requirements. It is important to stay informed about the legal landscape and ensure that you are in compliance with applicable laws.
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• Jan 13, 2022 · 3 years ago
  At BYDFi, we understand the risks associated with self custody in the crypto space. While self custody offers greater control and privacy, it also comes with certain risks. One of the main risks is the potential for loss or theft of private keys. If you lose your private keys, you may permanently lose access to your funds. To mitigate this risk, it is important to follow best practices for secure storage and backup of private keys. Another risk is the possibility of phishing attacks and social engineering. Hackers may attempt to trick you into revealing your private keys through fraudulent emails or websites. It is crucial to be vigilant and verify the authenticity of any requests for your private keys. Additionally, self custody requires technical knowledge and can be challenging for beginners. We recommend seeking professional advice or using trusted custodial services if you are not confident in your ability to securely manage your own keys.
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