As crypto adoption grows, securing digital assets is becoming as important as choosing where to invest. From selecting the right crypto wallet and protecting private keys to dealing with phishing threats and planning for the transfer of assets after death, investors face a range of security and succession challenges. In this interview, FYI9 Correspondent speaks with Vikas Gupta, Country Head, Bybit India, to understand the key risks crypto investors should be aware of, what happens when wallet credentials are lost, and how investors can put a practical succession plan in place to ensure their digital assets remain accessible to their legal heirs.
Neeta: How should investors choose a crypto wallet?
Vikas Gupta: The right wallet depends on an investor’s needs, risk tolerance and understanding of custody. Security should always take priority over convenience.
Investors should choose a wallet based on their usage, risk appetite and level of technical comfort. It is also important to understand the difference between self-custody and custodial wallets and to prioritise security features such as multi-factor authentication (MFA), passkeys and transaction controls.
Investors should also ensure that the wallet supports the assets and networks they use. For larger holdings, it can be useful to separate long-term holdings from funds intended for regular transactions.
Neeta: What are the most common security risks for crypto investors?
Vikas Gupta: While blockchain infrastructure can be highly secure, users can still lose assets due to phishing, compromised devices or poor key management.
Phishing and social engineering remain among the biggest risks. Investors should never share their private key or seed phrase, even with someone claiming to be from customer support. They should also be cautious of fake applications, websites, links and browser extensions.
Before signing any transaction, users should carefully verify wallet addresses and understand what they are approving. Using strong authentication and keeping devices and software updated are also important steps towards protecting digital assets.
Neeta: What happens if an investor loses their private key?
Vikas Gupta: Losing a private key does not erase the crypto assets from the blockchain, but it can make those assets permanently inaccessible. This is why securely backing up recovery credentials is critical.
If an investor has securely backed up their seed or recovery phrase, the wallet can generally be restored. However, if both the private key and the recovery mechanism are lost, the assets may become irretrievable.
Similarly, losing a hardware wallet does not necessarily mean that the crypto assets are lost. The recovery phrase is what ultimately enables access to the wallet and its assets.
If a crypto investor dies without informing their family, what happens to the assets? Can legal heirs realistically discover and claim them?
Crypto assets do not automatically become inaccessible simply because the investor has passed away. However, the practical ability of legal heirs to recover them depends heavily on where the assets are held and whether the family has enough information to identify those holdings.
For assets held with a regulated crypto-asset service provider, there is generally an identifiable account and a process through which a claimant can approach the platform with appropriate documentation, subject to the platform’s policies, KYC/AML requirements and applicable succession law. Indian authorities already recognize processes for legal representatives of deceased taxpayers, while FIU-IND’s framework places VDA service providers within the AML framework.
At Bybit, users can appoint an executor and set up a Will so that the transfer process to the designated beneficiaries can be done smoothly, after their death.
The situation is considerably more difficult for self-custodied assets. If the family does not know that the wallet exists, does not know the wallet address or cannot access the required private key/seed phrase, there may be no central intermediary that can recover the assets. In practical terms, the assets can remain technically on-chain but become inaccessible.
Neeta: What should an Indian crypto investor put in place today?
Vikas Gupta: Investors should think about crypto succession as a combination of legal ownership, discoverability, and technical access.
At a minimum, investors should consider:
- Having a properly drafted Will that specifically addresses virtual assets.
- Keeping nominations updated wherever the platform provides a nomination facility.
- Maintaining a secure and periodically updated inventory of crypto holdings, including the exchanges and wallets where the assets are held.
- Leaving clear instructions about where the assets are held without unnecessarily exposing sensitive credentials.
- For self-custodied wallets, establish a secure inheritance mechanism for private keys or seed phrases rather than simply recording the seed phrase in an ordinary document.
- Ensuring that the executor or family knows that such a record exists and understands how it can be accessed after the investor’s death.
- Periodically reviewing the arrangement as wallets, exchanges, and holdings change.
Neeta: What is the biggest mistake investors make?
Vikas Gupta: The biggest mistake is treating inheritance and access as the same problem. Naming someone as an heir or nominee is only one part of the process. The family also needs a secure way to establish what assets exist and initiate the appropriate claim or transfer process.
At the same time, simply sharing a seed phrase or private key with family members is not a safe succession strategy. Anyone who obtains those credentials could potentially gain immediate control of the assets, irrespective of the investor’s Will.
The better approach is to create a structured succession plan: document the existence and location of the assets, legally establish the intended beneficiary, and use a secure mechanism for releasing access information only when appropriate.
Also read – Bybit Launches Bybit Odds for Trading BTC and ETH Price Views
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