What are my rights if my cryptocurrency wallet or exchange account was hacked?
If a regulated exchange account was hacked due to the platform's security failure, you may have a claim against the platform — but most crypto held in unhosted wallets has no equivalent to deposit protection, making prevention the main line of defence.
Last reviewed: 10 June 2026
Explanation
The rights available to a hacked crypto user depend heavily on where the crypto was held. Regulated cryptocurrency exchanges in the UK must comply with FCA requirements and maintain appropriate safeguards. If an exchange was compromised through its own security failure rather than your own error, you may have a claim against the platform. Some exchanges have voluntary compensation funds.
For unhosted ('self-custody') wallets, there is no third party responsible for security. If a private key is compromised through malware, phishing, or social engineering and crypto is stolen, there is no equivalent of deposit protection or chargeback. Blockchain transactions are irreversible.
If your exchange account was accessed through your own credentials being compromised (phishing for a seed phrase or exchange password), the platform is less likely to bear liability — though it depends on whether they provided adequate security features (e.g., 2FA requirements) and appropriate warnings.
This is a rapidly evolving area of law. Some class actions and regulatory proceedings against major exchanges following hacks have resulted in user compensation, but outcomes vary. A solicitor experienced in crypto litigation can advise on your specific situation.
Common red flags
- You entered your seed phrase into a website or gave it to someone — do not share a seed phrase with anyone
- Your exchange account shows transactions you did not authorise
- You received a message claiming to be from your exchange asking you to verify your account
- An 'exchange upgrade' or 'wallet migration' required you to re-enter credentials
What to do now
- Report to your exchange immediately and request account security measures and investigation
- Report to Action Fraud and your national cybersecurity authority
- Contact the FCA if the exchange is UK-regulated and they failed in their security obligations
- Consult a solicitor about claims against an exchange that failed to protect your account
- Preserve all transaction records and communications as evidence
- Review and upgrade your personal security practices for any remaining assets
Frequently asked questions
Does FSCS protect cryptocurrency held at a UK exchange?
Generally no. FSCS covers deposits at authorised banks and certain regulated investments. Most crypto held at exchanges does not qualify as a protected deposit. Some exchanges have their own insurance policies; check your exchange's terms.
Can stolen crypto be traced and recovered?
In some cases, yes. Blockchain analytics firms can trace movements of stolen crypto across wallets. When funds reach a regulated exchange that applies KYC, there is a chance of freezing and recovery. Law enforcement has successfully traced and recovered significant crypto theft proceeds in notable cases, though it requires speed and expertise.