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Users must also recognize critical truths about crypto exchanges, including the fact that they are not FDIC insured and thus do not guarantee the protection of funds. The centralized nature of these platforms means they hold the keys to user accounts, allowing them to freeze funds arbitrarily, as seen in numerous complaints lodged by users.
For greater security and peace of mind, transitioning to cold storage wallets is recommended. By using cold wallets, cryptocurrency holders maintain control over their assets and avoid reliance on third-party platforms. While the challenge lies in responsibly managing these wallets and safeguarding seed phrases, many find that this practice significantly reduces the risk of losing their investments.