The Biggest Risk in Crypto That Most Investors Completely Ignore

By Leo Sun – Apr 15, 2026 at 1:50PM ESTKey PointsCryptocurrencies rely on centralized layers that are prone to failure.Investors should take steps to mitigate those counterparty and infrastructure risks.Volatility is often considered the biggest risk in investing in cryptocurrencies. Even Bitcoin (BTC 0.07%), the world's most valuable cryptocurrency, endured 70%-80% peak-to-trough declines during the crypto crashes in 2017-2018 and 2021-2022. However, many investors often overlook another major risk: the fact that you could suddenly lose access to your own tokens. Image source: Getty Images. Don't ignore the counterparty risk Cryptocurrencies are often marketed as "decentralized," but they're actually dependent on layers of centralized platforms, such as exchanges, custodians, lending platforms, and stablecoin issuers. If those platforms fail, you could be locked out of your crypto holdings -- even if the underlying tokens continue trading normally on other exchanges. ExpandCRYPTO: BTCBitcoinToday's Change(-0.07%) $-53.63Current Price$74250.00Key Data PointsMarket Cap$1.5TDay's Range$73617.00 - $74721.0052wk Range$60255.56 - $126079.89Volume41B That's what happened to investors who put their tokens in FTX, BlockFi, and Celsius Network. These platforms all collapsed because they diverted their customers' funds into other risky investments that ultimately failed. In other words, their customers unwittingly became unsecured creditors in their risky, opaque business ventures. How can investors avoid that risk? Coinbase (COIN +4.02%) and other major crypto exchanges segregate their customer assets from their corporate assets to avoid repeating those fatal mistakes. However, Coinbase is still vulnerable to hacks and outages, and it admits its crypto investors "could be treated" as general unsecured creditors in the event of a bankruptcy. To avoid those risks, investors should put their coins in hardware wallets, spread their assets across multiple platforms, and avoid high-yield staking products that sound too good to be true.Read NextApr 15, 2026 •By Leo SunThe Tax Implications of Buying and Selling Cryptocurrency That Most IgnoreApr 15, 2026 •By Alex CarchidiIf You Own Cryptocurrency, You Need to Understand What's Happening With Oil Right NowApr 14, 2026 •By Leo SunHere's Why You Shouldn't Put More Than 5% of Your Portfolio in Any One CryptoApr 14, 2026 •By Anders BylundWhy Bitcoin Is Increasingly Being Treated Like Digital GoldApr 14, 2026 •By Leo SunIs Now Actually a Good Time to Buy Cryptocurrency?Apr 13, 2026 •By Neil PatelWhere Will Bitcoin Be in 10 Years?About the AuthorLeo Sun is a contributing Motley Fool stock market analyst who has worked with the company since 2013, covering technology, consumer goods, industrial, and financial sectors. He became a self-made millionaire by age 40 through long-term investing, crediting lessons from Warren Buffett and Peter Lynch. Leo is a regular guest on CNBC Asia providing stock analysis on Chinese technology companies, including Tencent, Baidu, and Alibaba. He previously wrote for InvestorGuide and holds a bachelor’s degree in English from the University of Texas at Austin.TMFSunLionX@TMFSunLionStocks MentionedBitcoinCRYPTO: BTC$74,250.00(-0.07%)-$53.63Coinbase GlobalNASDAQ: COIN$192.64(+4.46%)+$8.23*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.