Cryptocurrency offers freedom with notable responsibility because it is not like traditional banking systems, where lost funds can sometimes be recovered.
Crypto ownership is simple: whoever controls the private keys controls the coins. That’s why secure storage and scam awareness aren’t optional; they’re essential survival skills in the digital space.
The simple truth in crypto security is that control and convenience rarely coexist. The easier it is to access your funds, the more exposed you are to risk.
In fact, globally, illicit addresses received at least $40.9 billion in 2024, possibly more once undisclosed cases are included.
In Nigeria, the largest crypto adoption in Africa, crypto scam revenue is part of a larger global trend, and scams have become more visible. Authorities arrested 792 suspects in Nigeria linked to a crypto romance / investment fraud ring.
These means, every investor must build a personal threat model, weighing their activity level against how much risk they can tolerate. For long-term holders, that usually means prioritising control and security over quick access.
Hot and cold wallets
Wallets come in two main types: hot and cold. Hot wallets, such as exchange apps or mobile wallets, are always online, offering convenience for traders who move funds frequently.
The trade-off is exposure to phishing attacks, malware, and exchange hacks. A hot wallet is just like your digital pocket cash, best kept light and used for short-term needs.
Cold wallets, on the other hand, store private keys offline. Some devices designed for that, like Trezor, Ledger, or Coldcard, isolate your crypto from the internet to make it immune to attacks.
They are ideal for long-term storage or extensive holdings but introduce a different risk, including physical loss or damage.
A cold wallet is only as safe as its backup. That’s why investors must securely store their recovery phrases on durable materials such as steel plates, not paper or digital files that could burn, corrode, or be hacked.
No matter how advanced your hardware, poor operational discipline can undo it all. For example, storing your recovery phrase in an email draft or cloud drive is an open invitation to disaster, which means your recovery key should never touch the internet.
Custodial wallets provided by exchanges or institutions offer a tempting level of convenience. They handle key management, password resets, and, in some cases, insurance.
But the downside is counterparty risk. If the exchange gets hacked, freezes accounts, or goes insolvent, your assets could vanish overnight.
Non-custodial wallets give you complete control and full responsibility. Losing your recovery phrase means permanent loss. There’s no forgot password button in the blockchain world.
For most savvy investors, the best approach is a hybrid one: keep the bulk of your holdings in cold storage, while maintaining a small balance in a hot or custodial wallet for trading and payments.
So, if you want to protect your digital wealth, follow these steps carefully.
1. Passwords and scammers’ strategy
Cybercriminals are constantly devising new ways to steal crypto, so your security must improve. Many still rely on basic security measures like SMS two-factor authentication (2FA), which is no longer safe.
Scammers now use a trick called SIM-swapping. In this attack, they take over your phone number and use it to access your crypto accounts, bypassing your 2FA. Once they gain access, they can drain your wallet in seconds.
The safer option is to use hardware security keys or Passkeys. These tools use strong cryptographic methods to confirm your identity and protect your accounts.
Even if a scammer tries to send you to a fake login page, your Passkey will not work there, keeping you safe.
It’s also very important to protect the device you use for crypto. Don’t use the same computer to manage crypto and casual internet browsing. Hackers can install malware that silently changes wallet addresses on your clipboard, making you send money to them instead.
Always confirm the transaction address on your hardware wallet’s screen before approving any transfer.
2. Spotting and avoiding scams
The crypto space attracts both real investors and professional scammers. Many fraudsters take advantage of people’s desire to make quick money.
They use different tricks — romance scams, fake investment offers, and social media promises of guaranteed profits.
A simple rule helps you stay safe: if someone promises high returns or asks to be paid in crypto, it’s a scam.
Another danger is hidden in decentralised finance (DeFi) in smart contracts. Some developers create fake tokens or platforms and then carry out rug pulls, which means they take all the invested funds and disappear.
Before you invest in any crypto project, do your homework. Check if the project’s code is available on trusted blockchain explorers like Etherscan.
Ensure there is a real development team behind it, with verifiable information. Also, avoid tokens where one wallet holds most of the supply; that’s a big red flag.
3. How AI is used in scams
AI has made scams even more convincing. Scammers now use deepfake videos of celebrities, CEOs, or crypto experts to promote fake investment schemes. These videos look real but are entirely fake.
Do not believe videos, voice notes, or social media messages at face value. Always confirm information directly from the official websites or verified companies’ accounts.
Remember, genuine organisations rarely send direct messages on WhatsApp, Telegram, or social media asking you to invest money.
AI chatbots and fake customer service pages also trick people into revealing their wallet details or recovery phrases. Never share such sensitive information online — no honest crypto company will ever ask for it.
4. What to do if you fall victim to a scam
If you realise you’ve been scammed, act immediately. Stop all communication with the scammer and gather all the evidence you can, such as wallet addresses, chat messages, screenshots, and transaction IDs. These details will help investigators track the fraud.
Report the incident to your local law enforcement agency or the cybercrime unit in your country.
In Nigeria, victims can contact the Economic and Financial Crimes Commission (EFCC) or the Nigerian Police Cybercrime Unit.
In South Africa, report cases to the South African Police Service (SAPS) Cybercrime Division or the Financial Sector Conduct Authority (FSCA).
In Kenya, victims should contact the Directorate of Criminal Investigations (DCI) Cybercrime Unit or the Central Bank of Kenya (CBK) if the scam involves financial platforms.
In Ghana, report cases to the Cybercrime Unit of the Ghana Police Service or the Bank of Ghana for financial-related scams.
Beware of so-called recovery agents who promise to return your funds for a fee. Most are part of another scam designed to take more money from victims.
In the end, crypto security is a personal responsibility. You are your own bank, and your safety depends entirely on your awareness, discipline, and caution in every online interaction.