A debate of a decade has returned as Autocustody becomes smarter

Here we go again: a centralized encryption exchange (CEX) was pirated, this time probably by the greatest sum in the history of humanity. We were lucky to avoid the worst: collapse of the platform and devastating consequences for the industry. The incident reminded us again that even stronger market players are not invincible.

The freedom of CEXS to manage customer funds comes with risks, reminding users that good storage without custody and is not the safest. With recent advances in security features, wallets safeguard coins and help users make the most of their cryptography.

Gold rules never oxidize

After the Bybit trick of $ 1.5 billion, things were resolved quite fast. However, if the platform did not maintain 1: 1 reservations for customer funds, the Hack could have serious consequences for the entire industry. When FTX liquidity problems emerged in 2022, an execution of the bank killed the platform in the days, and billions of payments just start.

Historically, CEX have been a main objective for computer pirates. Between 2012 and 2023, centralized exchanges were victims of 118 hacks, defeated Almost $ 11 billion. This is 11 times more than money stolen directly from Blockchain networks and cryptocurrency wallets. Again and again, we see how vulnerable the criptography market tops can be. The golden rule of “not your keys, or your bitcoin” is still very relevant.

Making a centralized cryptographic exchange deposit means delegating the storage of your money. CEX maintain all private keys and, therefore, have complete control over customer funds. In addition to a soft commercial experience, this implies some unpleasant consequences.

First, centralized platforms store substantial amounts in some wallets, which makes them a frequent objective for computer pirates. CEX use cold wallets and multisig transactions, which is supposed to be a final method. However, this framework is based on a third -party infrastructure to merge signatures, and these systems turned out to be vulnerable. When merchants allow CEXS to maintain their private keys, there is the possibility that they lose all their funds one day for reasons why they cannot control completely.

In addition to the hacks, there are many other ways in which we risk our funds by delegating custody. Centralized exchanges can freeze accounts for sophisticated legal reasons, impose withdrawal limits and reliable funds, which leads to bankruptcy. History suggests that these things often happen unexpectedly, and the only way to prepare is to assume the responsibility of storing our money in our own hands.

Not only encrypted

When it stores cryptographic in a non -custodial wallet, its private keys reside on their device in an encrypted form. You have complete control over your funds, unlike centralized platforms where you don't have any.

Autocustody is not zero risk. It can commit to any decentralized finance protocol (DEFI) or exchange coins, even without listing. This freedom comes with great responsibility: defi platforms have become a more frequent attack <a target="_blank" data-ct-non-breakable="null" href="https://www.chainalysis.com/blog/crypto-hacking-stolen-funds-2025″ rel=”null” target=”null” text=”null” title=”null”>aim In recent years. Developers often focus on rapid growth, leaving behind security measures.

However, today's wallets admit users' freedom, giving them more tools to protect their funds than ever. These begin with some layers of encryption, making sure that no one but can reach their private keys. An access code often verifies outgoing transactions and decentralized application permits (DAPP), so there is double protection for daily wallet activities.

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Some wallets even eliminate the need to remember seed phrases while keeping them decentralized. If you set a multiparty computing wallet, private keys extend through multiple devices. There is no risk of a single point failure, and can recover access to coins even if a wallet is lost.

Today's security measures have gone even further, which makes the wallets “only storage” the past of the past. In addition to private key encryption, wallets detect risks around the cryptography panorama, which helps users limit interactions with malicious projects. Dedicated systems detect phishing attacks, malicious addresses and fraudulent contracts, show risk alerts for users and help prevent theft.

Sometimes, users give DAPPS excessive permits, allowing indefinite access to their funds, and then forget that they did. Some wallets provide simple tools to review the previously given permits and revoke access, especially if the system marks as risky.

Responsible wallets also constantly experience independent security audits by multiple parts, verifying their central code and additional features, such as tokens exchange tools, nft markets, etc. Some platforms maintain a protection fund to reimburse users in case of a security incident. Finally, some also educate users on how to protect themselves from scams.

Good wallets without custody not only store funds well. They help you use them safely, taking full advantage of your coins.

The massive amounts stored in CEXS wallets attract computer pirates as a flame will attract moths. A solution is to disseminate even more wallets to compromise it does not put the entire system at risk. Another is that users minimize dependence on centralized platforms and recover control of their funds, taking advantage of the intelligent wallet security characteristics.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The points of view, the thoughts and opinions expressed here are alone of the author and do not necessarily reflect or represent the opinions and opinions of Cointelegraph.