How it works
Custody can simplify account recovery and fiat access, but it introduces dependence on the provider. Self-custody removes that intermediary while transferring operational responsibility to the user.
What to check
Compare legal ownership terms, withdrawal rights, recovery options and key control. The best structure depends on what risks the user can realistically manage.
- Identify who controls the keys
- Read withdrawal and ownership terms
- Assess recovery responsibility
Limits and risks
Custodial failure can block access; self-custody mistakes can be irreversible. Neither model removes risk, and splitting assets across methods can create additional complexity.
Primary sources
Bitcoin Developer Reference↗Ethereum developer documentation↗FATF: Virtual Assets↗General information only. Investment products can lose value, and terms, fees and regulation can change.