In May 2025, Coinbase, one of the largest cryptocurrency exchanges in the U.S., disclosed a significant data breach. The breach involved overseas customer support agents who were bribed to access sensitive customer data, including names, contact details, and partial Social Security numbers.
While no passwords or private keys were compromised, the incident highlighted vulnerabilities in relying on centralized platforms for cryptocurrency storage. This breach has reignited discussions around the importance of self-custody in the crypto space.
Self-custody refers to individuals holding and managing their private keys, thereby maintaining full control over their digital assets without relying on third-party services. One notable solution in this domain is the Tangem Wallet, a hardware wallet that meets almost all requirements.
Why Coinbase’s Problems Show the Importance of Self-Custody
Third-Party Risks
The Coinbase incident underscores the dangers of entrusting third parties with sensitive information. Human factors, such as insider threats, can compromise user data despite robust security measures.
Financial Implications
Coinbase estimated the breach could cost between $180 million and $400 million in remediation and customer reimbursements. Such financial repercussions can impact the platform’s stability and user trust.
Regulatory Scrutiny
The breach attracted attention from regulatory bodies, leading to investigations and potential legal challenges. This increased scrutiny can result in operational disruptions for the platform and its users.
Pros of using a self-custodial wallet
Complete Control
By managing your own private keys, you eliminate reliance on third parties, reducing exposure to external risks
Enhanced Security
Self-custody wallets, especially hardware wallets, store private keys offline, making them less susceptible to online threats like hacking and phishing.
Privacy Preservation
Self-custody allows for greater privacy, as users aren’t required to share personal information with centralized platforms.
Why Tangem is a User-Friendly Self-Custodial Wallet
Tangem Wallet is a hardware wallet designed to simplify the self-custody experience. It combines security with ease of use, making it accessible even to those new to cryptocurrency.
Key Features of Tangem Wallet
NFC Technology: Tangem uses Near Field Communication (NFC) to enable quick and secure transactions by simply tapping the wallet card to a smartphone.
Offline Storage: Private keys are generated and stored within the wallet’s secure chip, ensuring they never leave the device or connect to the internet
Multi-Currency Support: Tangem supports over 16,000 cryptocurrencies, including Bitcoin, Ethereum, and various DeFi tokens.
User-Friendly Interface: With a straightforward setup process and an intuitive app, Tangem caters to both beginners and experienced users.
How to Set Up Your Tangem Wallet
Download the app: Install the official Tangem app from the App Store or Google Play.
Activate the wallet: Tap your Tangem card to your NFC-enabled smartphone to initiate the setup.
Create your wallet: Follow the on-screen instructions to generate your wallet and secure your private keys.
Backup options: Set up backup cards or record your recovery phrase to ensure you can restore access if needed.
Transfer funds: Move your cryptocurrencies from exchanges to your Tangem wallet for secure storage.
Frequently Asked Questions
What is the best self-custody wallet for crypto?
Tangem Wallet stands out as an ideal self-custody wallet, especially for beginners, due to its user-friendly design and security. It offers a tap-and-go setup, making crypto storage secure and accessible.
What is a self-custody wallet in crypto?
A self-custody wallet, also known as a non-custodial wallet, allows users to have full control over their private keys and maintain their cryptocurrency assets.
Is Coinbase Wallet a self-custody wallet?
Yes, Coinbase Wallet is a self-custody wallet that gives users control over their private keys and crypto assets. It’s distinct from the Coinbase exchange account, which is custodial.
How do I move crypto to self-custody?
To move crypto to self-custody, transfer your assets from an exchange to a self-custody wallet by sending them to your wallet’s address. To avoid errors, double-check the address and understand the process.
What is the safest crypto wallet in the world?
Tangem Wallet is considered one of the safest due to its offline storage of private keys, elimination of seed phrases, and use of secure hardware. Its design minimizes risks associated with online threats and human error.
Is Ledger a self-custody wallet?
Yes, Ledger offers self-custodial hardware wallets, meaning users retain full control over their private keys and crypto assets.
What are the risks of crypto custody?
Custodial solutions involve trusting third parties with your assets, which can lead to risks like hacks, mismanagement, or regulatory issues. Self-custody eliminates these intermediaries but places the security responsibility solely on the user.
Should I use Kraken or Coinbase?
Both Kraken and Coinbase are popular exchanges. Your choice depends on factors like user interface preference, available features, and fee structures. It’s advisable to research both platforms to determine which best meets your needs.
Is MetaMask a self-custody wallet?
Yes, MetaMask is a self-custody wallet that allows users to manage their private keys and interact with decentralized applications directly.
What are the disadvantages of Coinbase Wallet?
As a software wallet, it’s susceptible to online threats if not properly secured.
What is the best self-custody crypto wallet?
Tangem Wallet is highly recommended for its blend of security and ease of use, making it particularly suitable for beginners seeking self-custody solutions.
Is it safe to leave crypto on Coinbase?
While Coinbase employs robust security measures, storing large amounts of crypto on any exchange carries inherent risks. For enhanced security, transferring assets to a self-custody wallet like Tangem is advisable.
How do self-custody wallets work?
Self-custody wallets store your private keys, granting you full control over your crypto assets. Transactions are signed locally, and no third party can access your funds.
How do I get a self-custody wallet?
You can obtain a self-custody wallet by downloading a reputable app like MetaMask or purchasing a hardware wallet such as Tangem. Follow the setup instructions carefully to ensure your assets are secure.
Where is the safest place to keep crypto?
The safest place to store crypto is in a self-custody hardware wallet like Tangem, which keeps your private keys offline and under your control.
Which crypto wallets are custodial?
Custodial wallets are managed by third parties, such as exchange-hosted wallets on platforms like Coinbase.com or Kraken, where the service provider holds your private keys.
Is Ledger a self-custody wallet?
Yes, Ledger provides self-custody hardware wallets, allowing users to maintain full control over their private keys and crypto assets.
Is MetaMask a self-custody wallet?
Yes, MetaMask is a self-custody wallet that enables users to manage their private keys and interact with decentralized applications.
What is the difference between a self-custody wallet and an exchange wallet?
A self-custody wallet gives you full control over your private keys and assets, whereas an exchange wallet is custodial, meaning the exchange holds your keys and manages your assets on your behalf.
What is the difference between a cold wallet and a self-custody wallet?
A cold wallet is a type of self-custody wallet that stores private keys offline, enhancing security against online threats. All cold wallets are self-custody, but not all self-custody wallets are cold wallets.
What is the difference between self-custody and custody?
Self-custody means you directly control your private keys and assets, bearing full responsibility for their security. Custody involves a third party managing your private keys and assets, which can introduce additional risks.
Conclusion
Recent breaches highlight the weaknesses of centralized cryptocurrency platforms. Self-custody solutions like Tangem Wallet allow users to control their digital assets, improving security and privacy. As the crypto world changes, focusing on self-custody is a wise move to protect your investments.