A Practical Taxonomy of Crypto Risk
What Actually Wrecks People
Most crypto risk frameworks are useless.
They list categories then stop.
No weighting. No interaction effects. No operational guidance.
People don’t lose money to “risk” in the abstract.
They lose it to specific, recurring failure modes.
Between 2020 and 2024, counterparty failures alone destroyed over $50 billion in user funds. Code exploits were a rounding error by comparison.
This post classifies those modes so you can name what you’re actually exposed to.
The Three Risk Layers
Crypto risk operates on three distinct layers: