Crypto Asset Security: Key Tips

Introduction

Crypto asset security is a set of measures designed to protect private keys, wallets, and exchange accounts. In recent years, the risk of losing funds has significantly increased: in 2024, cybercriminals stole approximately $2.2 billion, and the massive Bybit hack in February 2025 led to losses of ~$1.5 billion (source: Chainalysis, Reuters). Additionally, cyber threats are compounded by tightening regulatory oversight: the SEC alone initiated 33 crypto-related enforcement actions in 2024, recovering a record $8.2 billion (source: SEC).

These facts highlight the importance of a responsible approach to storing digital assets. In this article, we will break down key risks, practical recommendations, and the significance of AML/KYC procedures for protecting your funds.

Key Risks for Investors

1. Theft of Private Keys and Seed Phrases

Self-custody of assets requires strict protection of private keys. Losing access to them makes it impossible to recover your funds.

2. Centralized Platform Risks

Exchanges and wallet services are vulnerable to hacks and bankruptcies. For example, the Bybit hack in 2025 demonstrated that even large platforms are not immune to asset loss.

3. Regulatory Restrictions

Requirements from the SEC and other regulators are increasing oversight of cryptocurrency transactions. Interacting with addresses linked to money laundering or sanctions can lead to account freezes.

4. “Dirty” Crypto

Using crypto assets of suspicious origin can lead to legal consequences and the freezing of funds.

How to Protect Yourself: Practical Tips

1. Cold and Hot Wallets

• Keep the majority of your assets in cold wallets (hardware devices not connected to the internet).
• Use hot wallets for daily operations, but only with minimal balances.
• Regularly update your wallet software and create backups of your seed phrases.

2. AML Screening Before Transfers

Before sending funds, check the recipient's address using analytical tools such as Chainalysis or Crystal Blockchain. This helps avoid interaction with sanctioned labels and “dirty” crypto.

3. Asset Diversification

• Distribute your funds across multiple exchanges and wallets.
• Avoid storing all your assets on centralized platforms.

4. Technical Security Measures

• Use two-factor authentication (2FA) on all exchanges.
• Install antivirus and anti-phishing protection on your devices.
• Apply multi-signature (multisig) setups for large transactions.

5. Provider Vetting

• Research the asset storage policies of your custodial services.
• Ensure they do not use rehypothecation and that they adhere to KYC standards.

The Role of AML Checking in Asset Protection

AML (Anti-Money Laundering) is a tool for checking addresses and transactions for links to illegal activities. Here is how it helps:

• Identifies suspicious addresses associated with hackers or sanctions.
• Reduces the risk of account freezes by regulators.
• Provides reputational protection for investors and businesses.

Steps for AML Integration:

1. Use public databases to check addresses before making a transfer.
2. For businesses, implement regular AML screening into counterparty policies.
3. If suspicious links are detected, decline the transaction and notify the platform.

Conclusion

To protect your crypto assets:

1. Use cold wallets and distribute funds across different platforms.
2. Check addresses through AML tools before making transfers.
3. Comply with KYC requirements and stay informed about regulatory changes.

These steps will help preserve your investments and minimize risks when working with digital assets.