On October 29, Binance suffered a theft of $6.3 billion, which the exchange claims originated from an engineer's computer compromised during a fake job interview. Two days later, Binance restored 98% of the assets using its own funds and resumed withdrawals the following day.
Data from the first half of 2026 shows 52 physical attacks, known as wrench attacks, resulting in losses of $124 million, with 33 of these incidents occurring in France. Other security risks include seed phrase compromises, signature phishing, and address poisoning, which caused significant individual losses in early 2026.
Self-custody carries its own risks, including device failures, such as the July 29 incident where ColdCard users lost over a thousand bitcoins due to a flaw in key generation. Unlike exchange hacks, individual losses often lack a counterparty to assist in recovery or provide compensation.
The author suggests that investors should diversify their holdings across multiple platforms, such as solid exchanges, self-custody solutions, and ETFs, rather than relying on a single method. This strategy aims to mitigate risks by acknowledging that all forms of asset custody involve some level of trust.
