I Had Funds Caught within the FTX Collapse. Right here’s How I Retailer Crypto Now (And Why You Want A number of Wallets) | by Sophia Lopez | The Capital | Oct, 2025

[ad_1] November 2022. FTX collapsed.

I had funds caught on the trade. Not my complete portfolio – I’d already moved most to chilly storage – however sufficient to harm.

Three years later, I’m nonetheless ready for partial reimbursement primarily based on 2022 costs. In the meantime, the crypto I may have held is price 7x extra.

That’s after I discovered: “not your keys, not your cash” isn’t a slogan. It’s a survival rule.

Right here’s how I retailer crypto now – and why you want a number of wallets, not only one.

The Factor No person Needs to Discuss About Quick ahead to October 2025: Trump pardons CZ. A $4.3 billion Binance wonderful disappears. Everybody celebrates the regulatory reset.

Me? I’m reminded that if political connections can erase a multi-billion greenback penalty, what makes you suppose your funds are secure on any trade?

Binance paid the wonderful. CZ served 4 months. Now he’s free, and the trade is stronger than ever.

Nice for crypto adoption. Horrible for anybody who thinks “too large to fail” means “secure to belief.”

As a result of right here’s the truth: exchanges get hacked. They go bankrupt. They freeze withdrawals. And when it occurs, your “Bitcoin” is only a quantity in another person’s database.

Not your keys, not your cash.

What Exchanges Don’t Inform You Let me hit you with some numbers that ought to scare you:

$1.4 billion stolen from exchanges and protocols in 2024. Whereas that is down from 2023, it’s nonetheless large.

Mt.Gox (2014): $450 million gone. Customers waited 11 years for compensation – and eventually began receiving partial reimbursement in 2024.

FTX (2022): $8 billion vanished. Sam Bankman-Fried received 25 years. Most customers? They received a claims quantity and are nonetheless ready. The reimbursement plan guarantees 118–142% of declare worth – however primarily based on 2022 costs. Bitcoin was $16,600 then. Immediately? $115,000. That’s a 7x alternative price.

Binance (a number of incidents): Regardless of being the biggest trade, they’ve confronted safety challenges together with the 2022 incident that resulted in $570 million affected (later recovered by freezing).

And people are simply the large names you’ve heard of. Smaller exchanges? They collapse usually.

Even when an trade doesn’t get hacked, they will:

• Freeze your account throughout “upkeep” (often whenever you wish to withdraw)

• Go bankrupt and tie your funds up in years of authorized proceedings

• Get regulated out of existence in sure jurisdictions

• Determine you violated some Phrases of Service you by no means learn

The sample? You don’t management the keys. They do. And when issues go incorrect, you’re simply one other creditor hoping to get pennies again.

What FTX Taught Me I saved crypto on FTX as a result of it was “handy.” The interface was clear. The yields had been good. Everybody I knew used it. Sam Bankman-Fried was on TV with celebrities. It felt secure.

Then one morning in November 2022, withdrawals stopped. Inside 48 hours, FTX filed for chapter.

My funds had been locked. No entry. No warning.

The FTX chapter course of revealed that buyer funds had been used for dangerous buying and selling at Alameda Analysis. The crypto wasn’t sitting in wallets. It was gone, gambled away.

The worst half? It was utterly preventable. If I’d spent a number of hundred {dollars} on {hardware} wallets and adopted correct safety, these funds would nonetheless be mine – and value 7x extra right now.

What Really Retains Your Crypto Secure A {hardware} pockets (additionally referred to as a chilly pockets) is a bodily gadget that shops your personal keys offline.

Consider it like this:

• Sizzling pockets (trade, cellphone app): Your keys are on-line, related to the web, susceptible 24/7.

• {Hardware} pockets: Your keys by no means contact the web. Hackers can’t entry what isn’t on-line.

While you wish to ship crypto, the transaction will get signed on the gadget itself, then broadcast. Your personal keys by no means depart the {hardware}.

Even when your laptop is contaminated with malware, even in the event you’re utilizing public WiFi, even when somebody’s watching your display – they will’t steal your keys.

It’s not foolproof. Nothing is. Nevertheless it’s the closest factor to “unhackable” that exists in crypto.

How I Retailer Crypto Now (The Multi-Layer Technique) After FTX, I redesigned my complete method. Right here’s the system I take advantage of:

Layer 1: Lengthy-Time period Chilly Storage What I take advantage of: A number of {hardware} wallets from completely different producers

Why a number of gadgets:

• Main Ledger Nano X: Important Bitcoin and Ethereum holdings

• Main Trezor Mannequin T: Backup + completely different safety structure

• If one firm has a vulnerability, the opposite protects my holdings

Storage:

• Gadgets in separate safe places

• Restoration phrases saved individually from gadgets

• By no means multi functional place

What goes right here:

• Bitcoin and Ethereum long-term holdings

• Any crypto I gained’t contact for years

• Nearly all of my portfolio

Why this works:

• Offline = unhackable by distant assaults

• Diversified throughout producers

• Bodily separation prevents single level of failure

Layer 2: Energetic Chilly Storage What I take advantage of: Secondary {hardware} pockets

Why separate from long-term storage:

• I don’t wish to continuously entry my important chilly wallets (safety threat)

• This pockets is for crypto I would transfer in 3–12 months

• Used for staking by official pockets apps

What goes right here:

• Crypto I’m staking (incomes 3–17% APY)

• Positions I would commerce inside the yr

• Medium-term holdings

Why this works:

• Can stake straight from {hardware} pockets (by Ledger Dwell/Trezor Suite)

• Stability between safety and accessibility

• Staking rewards with out trade threat

Layer 3: Trade Holdings What I take advantage of: Two exchanges (Binance + Coinbase)

Wait, didn’t you simply say exchanges are dangerous?

Sure. However right here’s the truth: you want exchanges for sure issues.

What I carry on exchanges:

• Buying and selling capital

• Stablecoins incomes yield (at present 4–8% APY)

• Small quantities of altcoins not supported by {hardware} wallets

My trade guidelines:

• Preserve minimal quantities

• Cut up between two exchanges (diversification)

• Withdraw instantly after shopping for

• Allow all safety features

Why this method:

• I can purchase crypto when alternatives come up

• Earn staking rewards on stablecoins

• If one trade collapses, I don’t lose all the pieces

The {Hardware} Wallets I Really Belief I’ve examined each main {hardware} pockets. Some are clunky. Some have horrible interfaces. Listed here are those I’d suggest.

Fast Comparability

💰 Worth

• Ledger Nano X: $149

• Trezor Mannequin T: $169

• Tangem Pockets: $50

• Ledger Nano S Plus: $79

🪙 Cash Supported

• Ledger Nano X: 5,500+

• Trezor Mannequin T: 1,500+

• Tangem Pockets: 6,000+

• Ledger Nano S Plus: 5,500+

📱 Connectivity

• Ledger Nano X: Bluetooth + USB ✅

• Trezor Mannequin T: USB solely

• Tangem Pockets: NFC (faucet to cellphone) ✅

• Ledger Nano S Plus: USB solely

🔐 Type Issue

• Ledger: USB gadget with display

• Trezor: USB gadget with touchscreen

• Tangem: Card (like bank card)

• Ledger: USB gadget with display

⭐ My Score

• Ledger Nano X: 9/10 (greatest total)

• Trezor Mannequin T: 9/10 (greatest for chilly storage)

• Tangem Pockets: 7.5/10 (greatest for newcomers)

• Ledger Nano S Plus: 8/10 (greatest worth)

Ledger Nano X – Greatest General ($149) That is what I take advantage of for staking and positions I would transfer inside a yr.

What I like:

• Helps 5,500+ cryptocurrencies (mainly all the pieces)

• Bluetooth connectivity (you should utilize it along with your cellphone)

• Ledger Dwell app is intuitive

• Constructed-in battery lasts weeks

• Can stake ETH, ADA, SOL, DOT straight from the gadget

What I don’t like:

• Not absolutely open-source (Ledger’s safety chip is proprietary)

• Barely pricier than funds choices

Who it’s for: Anybody who needs to stake crypto, use DeFi often, or wants cell entry.

Get it right here: [Ledger Official Store]

Press enter or click on to view picture in full dimension 2. Trezor Mannequin T – Greatest for Chilly Storage ($169) That is what I take advantage of for long-term Bitcoin and Ethereum storage.

What I like:

• Absolutely open-source ({hardware} and software program)

• Coloration touchscreen interface

• No Bluetooth (some see this as safer for chilly storage)

• Shamir Backup assist (can break up restoration phrase)

• Sturdy repute in Bitcoin neighborhood

What I don’t like:

• Helps fewer cash than Ledger (1,500+ vs 5,500+)

• No Bluetooth means much less handy for lively use

Who it’s for: Lengthy-term holders who prioritize most safety and open-source verification.

Get it right here: [Trezor Official Store]

3. Tangem Pockets – Greatest for Newbies ($50) A card-based {hardware} pockets that works with NFC (faucet to cellphone). Best to make use of, however restricted performance.

What I like:

• Least expensive possibility at $50

• Very simple (simply faucet to cellphone)

• No charging wanted (no battery)

• Helps 6,000+ cash

• Seems like a bank card (discreet)

• Sturdy (water/mud resistant)

What I don’t like:

• No display (should belief cellphone app)

• Can’t stake or use DeFi straight

• Much less safe than gadgets with screens (can’t confirm addresses on gadget)

• Tangem controls some features of key technology

Who it’s for: Full newcomers who need the best attainable setup, or as a backup pockets for small quantities.

Get it right here: [Tangem Official Store]

4. Ledger Nano S Plus – Greatest Finances Possibility ($79) Identical safety because the Nano X, fewer options. Good for intermediate customers on a funds.

What I like:

• Half the value of Nano X

• Identical safety chip

• Helps 5,500+ cash

• No battery to fret about

• Bigger display than unique Nano S

What I don’t like:

• No Bluetooth (should plug into laptop)

• Smaller display than Nano X

Who it’s for: Intermediate customers who don’t want cell connectivity.

Get it right here: [Ledger Official Store]

Which Pockets Ought to You Really Get? In case you’re model new to crypto (lower than $500):

Begin with Tangem Pockets ($50). It’s easy, low cost, and will get you accustomed to self-custody.

In case you maintain $500-$5,000:

Get Ledger Nano S Plus ($79). Greatest worth, full performance.

In case you maintain $5,000-$50,000:

Get Ledger Nano X ($149). You want Bluetooth comfort and staking functionality.

In case you maintain $50,000+:

Get each Ledger Nano X and Trezor Mannequin T ($318 complete). Cut up your holdings throughout completely different producers for optimum safety.

If you'd like most safety for long-term storage:

Get Trezor Mannequin T ($169). Absolutely open-source, no Bluetooth, excellent for chilly storage.

Why I Personal A number of Gadgets of the Identical Mannequin Right here’s one thing most guides gained’t inform you: I don’t simply personal completely different pockets manufacturers – I personal a number of items of the identical mannequin.

My precise setup:

• Two Ledger Nano X gadgets

• Two Trezor Mannequin T gadgets

• One Ledger Nano S Plus

• One Tangem (for small quantities/journey)

Complete: 6 bodily gadgets.

Why Purchase Duplicates? {Hardware} Failure {Hardware} wallets can break. Screens die. Buttons fail.

When my main Ledger’s display began glitching, I merely restored my accounts utilizing the identical 24-word phrase on my backup gadget and continued with out lacking a beat.

Geographic Redundancy I preserve gadgets in several places:

• Main gadgets: Safe places I entry usually

• Backup gadgets: Separate places (completely different metropolis/member of the family’s home)

If my home burns down, I lose one gadget. Not all of them.

Firmware Updates Firmware updates often trigger points.

My rule: By no means replace all gadgets without delay.

• Replace main gadget first

• Check for every week

• If steady, replace backup

This manner, if an replace causes issues, I at all times have a working gadget.

The Value-Profit Further price:

• Further Ledger Nano X: $149

• Further Trezor Mannequin T: $169

• Complete: $318 for peace of thoughts

For anybody holding important crypto, spending an additional $318 on backup gadgets is apparent threat administration.

The Precept of Practical Isolation Right here’s a safety idea most individuals miss: Don’t use the identical pockets for all the pieces.

My rule: Storage wallets keep offline. Energetic wallets deal with transactions.

Why This Issues Think about you’re interacting with a DeFi protocol. You suppose you’re approving a professional transaction, nevertheless it’s truly a phishing assault.

If all of your wallets are related to DeFi:

• Signal malicious transaction on Pockets A → drained

• Test Pockets B → signal comparable transaction → drained

• Pockets C? Identical sample → drained

In case you observe useful isolation:

• Storage Pockets: By no means connects to DeFi, by no means indicators good contracts

• Staking Pockets: Solely used by official apps (Ledger Dwell, Trezor Suite)

• Energetic Pockets: Used for DeFi, swaps, experiments

End result: Even when your Energetic Pockets will get drained, your Storage Pockets was by no means uncovered.

My Precise Pockets Capabilities Chilly Storage Wallets (By no means Contact These): • Main gadgets: Bitcoin and Ethereum long-term holdings ONLY

• No DeFi interactions

• No good contract approvals

• Solely receives deposits

• Saved in safe places, not often accessed

Staking Pockets: • Secondary gadget: Staking ONLY by official apps

• Ethereum, Cardano, Polkadot staking

• No exterior DeFi protocols

• No token approvals exterior official apps

Energetic Pockets: • Tertiary gadget: DeFi, swaps, new protocols

• This pockets interacts with good contracts

• Holds smaller quantities

• If compromised, restricted loss

Journey/Day by day Pockets: • Tangem card: Small quantities for each day transactions

• Straightforward to hold, faucet to cellphone

• If misplaced or stolen, minimal loss

Use Completely different Restoration Phrases That is crucial:

• Storage Pockets = Restoration Phrase A

• Staking Pockets = Restoration Phrase B

• Energetic Pockets = Restoration Phrase C

• Journey Pockets = Restoration Phrase D

In case your Energetic Pockets’s seed phrase will get compromised, your Storage Pockets stays secure.

The Setup Course of For Ledger: 1. Unbox, plug in by way of USB

2. Arrange 8-digit PIN

3. Write down 24-word restoration phrase (CRITICAL)

4. Set up Ledger Dwell app

5. Add Bitcoin/Ethereum accounts

6. Switch small take a look at quantity ($20)

7. Verify it arrives, then switch the remaining

Complete time: 20–half-hour

For Trezor: 1. Plug in, observe touchscreen prompts

2. Arrange PIN

3. Write down 24-word restoration phrase

4. Set up Trezor Suite

5. Add accounts

6. Check switch, then transfer important holdings

Complete time: 20–half-hour

For Tangem: 1. Obtain Tangem app on cellphone

2. Faucet card to cellphone (NFC)

3. Create pockets (Tangem generates keys on card)

4. Write down backup card entry code

5. Switch small take a look at quantity

6. Confirm it arrives

Complete time: 10–quarter-hour (best setup)

The One Mistake That Will Value You Every thing Shedding or exposing your 24-word restoration phrase. That phrase IS your crypto. If somebody will get it, they personal your funds. In case you lose it and your gadget breaks, your crypto is gone ceaselessly.

What NOT to do:

• ❌ Don’t take a photograph

• ❌ Don’t retailer it digitally

• ❌ Don’t retailer it along with your {hardware} pockets

• ❌ Don’t inform anybody, ever

What TO do:

• ✅ Write it on the cardboard offered

• ✅ Retailer in a fireproof secure

• ✅ Contemplate a metallic backup (survives fireplace/flood)

• ✅ Retailer backup copy in several bodily location

• ✅ By no means retailer all backups collectively

What I Realized From FTX Lesson 1: Centralization is a single level of failure FTX wasn’t hacked. It was mismanaged. Your funds are solely as secure because the individuals operating the platform.

Lesson 2: “Too large to fail” doesn’t exist in crypto FTX was the second-largest trade. It collapsed in 48 hours.

Lesson 3: Diversification isn’t non-obligatory If I’d break up my holdings correctly throughout chilly wallets and a number of exchanges, my losses would have been minimal.

Lesson 4: Liquidity issues Having some funds accessible means you'll be able to act when alternatives come up. Full chilly storage sounds secure, nevertheless it’s rigid.

Lesson 5: Self-custody is the endgame The purpose isn’t to keep away from exchanges ceaselessly. It’s to attenuate publicity and maximize self-custody for holdings you don’t want to the touch.

My Suggestions Based mostly on Your Holdings In case you maintain lower than $500: Begin with Tangem Pockets ($50). Easy, low cost, will get you began with self-custody.

In case you maintain $500-$5,000: Get Ledger Nano S Plus ($79). Greatest worth with full performance.

In case you maintain $5,000-$50,000: Get Ledger Nano X ($149) + backup gadget. You want cell entry and redundancy.

In case you maintain $50,000-$500,000: Get Ledger Nano X + Trezor Mannequin T ($318). Cut up throughout producers. Add backups of every.

In case you maintain $500,000+: Get a number of gadgets, use useful isolation, take into account multi-sig, seek the advice of a safety professional.

The Actual Value of Not Appearing A Ledger Nano X prices $149.

FTX taught hundreds of individuals this lesson the arduous means. Common losses? Hundreds per individual.

So that you’re risking hundreds to save lots of $149.

That’s not being frugal. That’s playing with cash you'll be able to’t afford to lose.

Right here’s What You Ought to Do Proper Now

In case you’re holding crypto on an trade, you’re taking an pointless threat.

For most individuals: Get a Ledger Nano X ($149)

On a good funds: Get a Tangem Pockets ($50) or Ledger Nano S Plus ($79)

For severe holdings: Get each Ledger Nano X and Trezor Mannequin T ($318 complete)

Set it up this weekend. Switch your funds. Sleep higher.

Not your keys, not your cash. Don’t study this the arduous means.

Transparency Word

Some hyperlinks on this article are affiliate hyperlinks. In case you purchase by them, I earn a small fee at no further price to you. I solely suggest merchandise I’ve personally examined and use myself. The {hardware} wallets defending my crypto proper now had been bought with my very own cash, and I sleep higher due to them.

What’s your setup? Nonetheless retaining funds on exchanges, or have you ever made the transfer to chilly storage? Drop a remark under – I learn each one.