Wallet security comes down to four decisions: where the recovery phrase lives, what signs your transactions, what your signatures permit, and which wallet faces risky sites. Chainalysis counted 158,000 personal wallet compromises in 2025, with at least 80,000 victims and about $713 million stolen, so the decisions are worth an evening.
Offline, on paper or metal, never typed into a site.
A hardware wallet with a screen you read.
Read the spender and amount. Revoke monthly.
A separate wallet for new apps and claim pages.
Where the recovery phrase lives
Your recovery phrase is the wallet, and everything else is an interface to it. Ledger says never to store it on cloud services or internet-connected devices, never to share it with anyone, including Ledger, and to keep it on paper or metal. Anyone who holds the words controls the funds from any device, and no support desk can reverse a transfer.
Backups come in a few formats. Trezor's documentation sets out the differences.
| Format | Words | Security level | Default on |
|---|---|---|---|
| BIP39 | 12 | 128-bit | Trezor Model T and older Safe 3 |
| BIP39 | 24 | 256-bit | Trezor Model One, and Ledger devices |
| SLIP39 (Shamir) | 20 | 128-bit | Trezor Safe 7, Safe 5 and Safe 3 from June 2024 |
All three are strong enough that guessing is not the risk. A Shamir backup can split the phrase into shares that you store in separate places, so no single share restores the wallet. Whatever the format, never type the words into an app or website.
How the phrase was generated matters as much as where it is stored. In July 2026 attackers swept Coldcard wallets whose seeds were built from weak randomness. Fortune counted 1,816 BTC, about $116 million, taken from more than 5,200 addresses by August 3. Coinkite's status page lists affected firmware on several models, including Mk2 and Mk3 before 4.2.0 and Mk4 and Mk5 standard releases before 5.6.0.
Its guidance has three points. An update is not a seed migration, because updating fixes future seed generation but does not repair an existing affected seed. Seeds built with at least 50 fair, private dice rolls may qualify for an exception. A strong passphrase adds a barrier but does not repair an affected seed. For new wallets with meaningful balances, Coinkite advises a strong passphrase and a recovery test before deposits.
Trezor Suite runs an entropy check automatically during setup, which verifies that the device used the randomness Suite supplied, and setup stops if it fails.
A passphrase has its own rules. Ledger's passphrase is a 25th word of up to 100 characters, it is not stored on the device, and a lost one means permanent loss of that hidden wallet. Trezor adds that a typo opens a different, probably empty wallet. It recommends passphrases only for experienced users who write the passphrase down and test access regularly. A passphrase you cannot recover is worse than none.
Read your wallet maker's security notices as well. Coldcard's page lists five fixed release tracks and four published independent checks of the fixes, and only an owner who opens it learns whether a seed must move. Subscribe to the maker's announcements and check the status page after any headline incident.
What signs your transactions
A software wallet keeps keys on a computer that also runs browsers and downloads. A hardware wallet signs on a separate device, and Ledger says its Secure Element chip is isolated from that insecure environment and can be trusted to show the details on its own screen.
The screen only helps if it shows something you can read. Ledger defines blind signing as approving a transaction without being able to interpret its contents, usually raw hexadecimal. Clear signing shows a human-readable summary: the asset, the amount, the destination or the contract interaction. Ledger's Transaction Check can also warn about a malicious contract before you sign.
The Bybit theft shows what happens when the interface lies. On February 21, 2025, attackers stole about 401,000 ETH, nearly $1.5 billion, Chainalysis reported. They had compromised a Safe developer's computer and added malicious JavaScript to the interface Bybit used, so the signers saw a legitimate-looking transfer. The FBI attributed the theft to North Korea.
The lesson is narrow and practical. A hardware wallet protects the key, and you still have to compare what the device shows with what you meant to do. If a high-value request appears only as unreadable data, treat it as one you cannot verify and stop. Download wallet software only from the maker's official channels, as Trezor advises.
What your signatures permit
Most theft from individuals does not break a key. It asks for a permission through the same interface as a legitimate action. ScamSniffer counted $83.85 million in phishing losses in 2025, including a $6.5 million theft through a Permit signature in September. A token approval gives a contract standing rights to move a token, and a permit signature can create one off-chain.
Three habits reduce the risk. Read the spender and amount on every request. Cap amounts instead of granting unlimited approvals where the app allows.
Open Revoke.cash on a monthly slot and revoke what you no longer use. Its Signatures tab lists potential approvals from permits that you can cancel before a scammer activates them, and Revoke.cash warns that scammers usually try to activate an approval as soon as possible. Our scam guide has a table of the requests you will meet, and our farming guide walks through the audit step by step.
Which wallet faces risk
Every risky surface, such as a new app, a claim page or a mint site, should meet a separate wallet that holds only what that day's activity needs. Use its own browser profile with its own bookmarks. Keep the hardware wallet for long-term funds, and never restore its phrase into a software wallet, because Ledger warns that this defeats the point of the device.
This does not stop phishing. It changes the worst case from losing everything to losing a small balance. Revoke.cash's advice on malware points the same way: use a hardware wallet and keep your seed phrase off your devices. It adds a caution. After you run a suspicious installer or terminal command, the absence of popups or error messages does not confirm that nothing happened, so assume the device is compromised until you have wiped it.
A one-evening setup
- Buy a hardware wallet from its maker and set it up on a computer you trust. On a Trezor, let the entropy check in Trezor Suite finish.
- Write the recovery phrase on paper or metal during setup. Never photograph it or type it anywhere but a wallet during recovery.
- Test recovery before you deposit. Coinkite gives the same advice for new wallets with meaningful balances.
- Send a small first transfer and check the full destination address on the device screen before you send the rest.
- Create a separate software wallet in its own browser profile for new apps and claim pages. Fund it with pocket money only.
- Put a monthly reminder in your calendar to review approvals on Revoke.cash for every chain you use.
Attacks worth knowing by name
None of these breaks the mathematics of a key. Each one preys on a process, which is why the defenses are procedures.
| Attack | How it works | What stops it |
|---|---|---|
| Approval or permit phishing | A site asks for an approval or signature that hands over token control | Read the spender and amount, revoke monthly, use a separate wallet |
| Address poisoning | Fake tokens or zero-value transfers from a lookalike address seed your history | Take addresses from the official source and check the full string |
| Fake support | Emails, calls and messages, including false device-deactivation notices, ask for your phrase | Any request for a backup is a scam, per Trezor |
| Malware and fake downloads | Steals data or swaps copied addresses, arriving as fake launchers, meeting tools or SDK updates | Official sources only, hardware wallet, phrase never on a device |
| Interface tampering | The attacker changes what the signer sees | Check the device screen, use clear signing |
| Weak key generation | Seeds built from predictable randomness can be rebuilt | Entropy checks, dice rolls, migrating after an advisory |
Revoke.cash cites a streamer who lost $31,000 in SOL after running a game with malware, and North Korean actors who took more than $300 million by posing as crypto figures in fake video meetings and sending fake SDK updates. Chainalysis put North Korean theft at at least $2.02 billion in 2025. It also noted that personal wallet compromises fell from 44 percent of stolen value in 2024 to 20 percent in 2025, in a year when Bybit alone was about 44 percent of all losses.
Build the four decisions once and keep the monthly review. If something does go wrong, the response steps depend on whether a signature or the phrase was exposed, and sending gas to a compromised wallet is the mistake to avoid.
