How to recover lost cryptocurrency—and how to keep it safe

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Where will the next security vulnerability pop up?

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Cryptocurrency scams are constantly evolving and growing more sophisticated, but you can take preventive measures to avoid ever becoming a victim. And if your crypto is stolen, there are ways to recover it.

Whether your goal is to recover your crypto or ensure that you never lose any, you need to know best practices for storage and recovery, as well as how to spot a crypto scammer or hacker.

Here’s how to recover and manage your crypto securely.

Are you the victim of a crypto scam? Recovery of your assets is unfortunately never guaranteed. You may have to involve law enforcement, but the anonymized and decentralized nature of cryptocurrency can confound their efforts. Still, there are a few steps you can take to increase the probability of successfully reclaiming your tokens:

Whether it’s stolen or lost, crypto (sadly) is difficult to recover. If your crypto is missing because you’ve simply misplaced your private keys (akin to your digital wallet’s password)—and this will be a bitter pill to swallow—your recovery options are limited. Depending on the amount you lost, here are a few things you could try.

Note that a few of these approaches can be costly and time-consuming. Unless you lost a significant amount of crypto, it might be better to just chalk it up to “lessons learned.”

When it comes to avoiding crypto scams, an ounce of prevention is worth a bitcoin of cure. Here are eight effective ways to keep your digital assets safe.

Your selection of digital wallet significantly affects the security of your crypto assets. A non-custodial wallet grants you sole access to the wallet’s private keys, which is more secure than allowing the custody of the private keys to stay with the wallet provider.

If you’re the only one who has custody of your private keys, you’re responsible for storing that 12- or 24-word seed phrase securely.

You can opt for a multi-signature version of a digital wallet. A “multi-sig” digital wallet requires two or more private keys to authorize a transaction, providing an additional layer of security. Multi-signature wallets are particularly relevant for high-value accounts, as they eliminate single points of failure and deter theft by requiring multiple approvals.

Your digital wallet places your assets in either cold or hot storage. Hardware wallets enable cold storage, which is the most secure because it’s not connected to the Internet. Prioritize cold storage for your digital assets, especially those that you’re holding long-term.

Internet-connected software wallets are convenient, but they’re less secure than their hardware counterparts. If you choose to use a software wallet, take care to not accrue a large account balance. Regularly transfer assets from your software wallet to a hardware wallet that you also maintain.

You can’t go wrong by learning about ways that other digital asset holders are getting scammed. Crypto social media communities are frequently abuzz about the latest heist, with victims commonly posting personal testimonials. New types of scams are endlessly arising, so it’s important to keep paying attention.

Does an emerging cryptocurrency or Web3 project seem especially alluring? Highly speculative projects, especially those that seem too good to be true, are more likely to be scams. Invest only in credible tokens and projects to minimize the likelihood of losing your assets.

Has crypto made you rich? Privately congratulate yourself, but resist the urge to brag publicly on social media. Disclosing your holdings or net worth can make you a prime target for scams, hacking attempts, and even real-life threats to your physical well-being.

If the recommendations above sound vaguely familiar, it’s because they’re just digital versions of real-world asset protection. Know who you’re doing business with, add layers of security and authentication, lock up your valuables, and diversify your holdings across institutions.

Cryptocurrency recovery is a fraught ordeal with no guaranteed outcomes. Whether you’re a scammer’s victim or you’ve simply misplaced your private keys, losing your digital assets can be traumatizing. Count your blessings if all your crypto is safe—and keep it that way by strictly adhering to security best practices.

Specific cryptocurrency platforms are mentioned in this article for educational purposes only and not as an endorsement.