Cryptocurrency exchanges and third parties offer storage for your coins through hot wallets, which are secure, but still online (and therefore still susceptible to hacking). Crypto held on an exchange or in a wallet is not FDIC-insured like money in the bank. Make sure you trade and hold your crypto on a platform that offers robust security measures — including keeping a significant amount of holdings in its own cold storage and two-factor authentication for users. Some exchanges may even have private insurance policies in case of theft or hacking.

1. Hackers can gain access to individuals’ crypto wallets or breach entire
cryptocurrency exchanges to steal their holdings. That’s why it’s essential to
store your crypto in a safe place, and practice good digital security habits.
Cryptocurrency exchanges and third parties offer storage for your coins
through hot wallets, which are secure, but still online (and therefore still
susceptible to hacking). Crypto held on an exchange or in a wallet is not
FDIC-insured like money in the bank. Make sure you trade and hold your
crypto on a platform that offers robust security measures — including
keeping a significant amount of holdings in its own cold storage and two-
factor authentication for users. Some exchanges may even have private
insurance policies in case of theft or hacking.
For the best protection against online fraud, many experts recommend cold
storage through an offline device not connected to the internet, similar to a
USB drive. But even cold storage comes with risks, like the possibility of
losing access to your investment completely if you forget your password.