It is generally safer for the average Joe to store his cryptocurrency on reputable exchanges rather than in his own wallets.

The popular phrase “not your keys, not your crypto” is often misinterpreted when applied to funds held on exchanges. While the phrase is accurate in its original context, it is misleading to suggest that exchanges do not secure their customers’ deposits. In fact, billions of dollars have been lost because users, whether inexperienced or not, fall victim to fraud or lose access to their wallets by forgetting or misplacing their seed phrases.

Critics often point to the high-profile failures of exchanges, such as FTX, to argue that funds are safer in personal wallets. However, this is akin to the outdated notion that money is safer under a pillow than in a bank. The losses incurred from bankruptcies or illegal activities involving exchanges are minor compared to the massive sums lost each year due to user error or fraud.

Therefore, I advise storing cryptocurrency on large, reputable exchanges. These platforms offer robust security measures and customer identification processes, making it much harder for fraudsters to succeed. Additionally, users do not need to worry about remembering a seed phrase, as they can access their funds at any time—even if they forget their login credentials.